August 2007 - Modern Distribution Management

Log In

Search

August 2007

Airgas Acquires $18M Safety Distributor

Leave a Comment / Finance, Mergers & Acquisitions, Free, Gases & Welding Equipment, Companies, Top Distributor Sectors, Safety Products, News, Subscriber Only /

Airgas, Inc., Radnor, PA, has acquired Dantack Corporation, a Grand Prairie, TX-based safety distributor with branches in Columbus, OH, and Richmond, VA. The business generated more than $18 million in sales in 2006.
&nbsp ;
The operations will be managed by Airgas Southwest, one of the Airgas regional companies, as a stand-alone business for the first few months. Later, operations in Ohio and Virginia will transition to other Airgas regions.
&nbsp ;
Airgas' safety distribution business generated $438 million in sales in fiscal 2007 through telesales and field-based safety specialists within its regional companies.
&nbsp ;
Dantack's extensive local coverage throughout Texas, combined with its national accounts program, makes it a great strategic fit for Airgas," said ...

Airgas Acquires $18M Safety Distributor Read More »

HD Supply Deal Closes

Leave a Comment / Finance, Mergers & Acquisitions, Free, Companies, Top Distributor Sectors, Building Materials/Construction, News, Subscriber Only /

The Home Depot has completed the sale of HD Supply to a trio of private equity firms -Bain Capital, Clayton Dubilier & Rice, and Carlyle Group.
&nbsp ;
As announced earlier this week, the terms were as follows: Purchase price of $8.5 billion, The Home Depot to own a 12.5% equity interest for $325 million, and The Home Depot guaranteed a $1 billion senior secured loan.

The acquisition includes a portfolio of 11 businesses and HD Supply Canada. The company will retain the HD Supply name.

We are thrilled to be associated with this group of distinguished private equity firms, and we are excited about the tremendous opportunities that lie ahead for our associates, our customers and our new owners," said Joe DeAngelo, CEO of HD Supply. "As an ...

HD Supply Deal Closes Read More »

Metals Drive Down Prices in Canada

Leave a Comment / Economic Trends, Research & Analytics, Metals Service Centers, Free, Top Distributor Sectors, News, Subscriber Only /

Source: Statistics Canada

In July, falling prices for metals and the strength of the Canadian dollar drove the prices of manufactured products down for a third consecutive month, while a jump in crude oil prices pushed raw materials prices upward.
&nbsp ;
From June to July, prices charged by manufacturers, as measured by the Industrial Product Price Index (IPPI), fell&nbsp ; 0.7% following two consecutive monthly declines. The drop in prices essentially reflects lower prices for primary metal products, motor vehicles and other transportation equipment, as well as chemical products. However, higher prices for petroleum and coal products, and lumber and other wood products tempered the decline in the IPPI.
&nbsp ...

Metals Drive Down Prices in Canada Read More »

Housing Drags on 2Q GDP

Leave a Comment / Top Distributor Sectors, Subscriber Only, Research & Analytics, News, Free, Economic Trends, Building Materials/Construction /

Residential investment continued to drag on GDP growth in the second quarter, according to the latest estimates by the Bureau of Economic Analysis.
&nbsp ;
Real gross domestic product -the output of goods and services produced by labor and property located in the U.S. -increased at an annual rate of 4% in the second quarter of 2007, according to preliminary estimates.
&nbsp ;
In the first quarter real GDP increased 0.6%.
&nbsp ;
These GDP estimates are based on more complete source data than were available for the advance estimates released last month. In the advance estimates, the increase in real GDP was 3.4%.
&nbsp ;
The increase in the second quarter reflects positive contributions from personal consumption expenditures (PCE) for services, exports, ...

Housing Drags on 2Q GDP Read More »

HD Supply – Deal or Yes Deal!

Leave a Comment / Economic Trends, Research & Analytics, Free, Companies, Subscriber Only /

The weeks leading up to closing the deal on HD Supply has all the stuff for some kind of bizarre reality TV show that would even trump the Donald. The 18-percent reduction in the final price tag for HD Supply raises potential flags for distributors on a number of levels. Let's explore a few.
&nbsp ;
All three panelists at our Distribution M & A audio conference in May agreed that the M & A market was even hotter in 2007 than the year before, but that we might be nearing the end of a strong ride. Did the bell just ring? That large a discount reflects a combination of factors; the easy ones are the downturn in residential construction and the credit crunch. There were a number of internal factors that we won't know ...

HD Supply – Deal or Yes Deal! Read More »

Judge Certifies Class-Action Against McKesson in Pricing Battle

Leave a Comment / Free, Operations, Top Distributor Sectors, News, Pharmaceutical & Health Care, Legal Issues in Wholesale Distribution, Subscriber Only /

A U.S. District judge certified a class-action lawsuit Tuesday against pharmaceutical distributor McKesson Corp., San Francisco, CA, in a legal battle over drug pricing, according to law firm Hagen Berman.
&nbsp ;
The suit, originally filed in U.S. District Court in Boston, MA, in October 2006 on behalf of consumers and third-party payers, alleges that McKesson -one of the largest pharmaceutical distributors in North America -entered into a secret agreement to artificially inflate the reported average wholesale price of thousands of drugs, a benchmark used by Medicaid and insurance plans to determine payment to pharmacies.
&nbsp ;
In her ruling, Judge Patti Saris certified the case as a class action representing millions of healthcare consumers who made co-payments on what ...

Judge Certifies Class-Action Against McKesson in Pricing Battle Read More »

Air Liquide Continues to Invest in Asia

Leave a Comment / Top Distributor Sectors, Subscriber Only, News, Gases & Welding Equipment, Free /

Air Liquide Electronics continues to expand in Asia -specifically China, Vietnam and Singapore. From the start of 2007, the company has invested 50 million euros (US$68.3 million) in the region.
&nbsp ;
In China, Air Liquide has signed a 15-year contract with SMIC (Semiconductor Manufacturing International Corporation, the largest and most advanced foundry in China) to supply on-site bulk carrier gases to their future Fab in the Wuhan East Lake high tech development zone.
&nbsp ;
In Singapore, Singapore Oxygen Air Liquide Pte Ltd will provide another Total Gas and Chemical Management operations, starting September 2007, for the new 300-mm fab of the world first silicon-on-insulator manufacturer Soitec, at Pasir Wafer Fab Park, on the eastern part of the island. SOXAL will ...

Air Liquide Continues to Invest in Asia Read More »

Graybar Sales Up 5.1% in First Half

Leave a Comment / Free, Companies, Top Distributor Sectors, Electrical, News, Subscriber Only /

Graybar, St. Louis, MO, distributor of electrical and communications products and related supply chain management and logistics services, reported $2.56 billion in sales for the first six months of 2007, an increase of 5.1% over the same period in 2006.&nbsp ; &nbsp ;

Sales improved along with moderate growth in the electrical and communications/data markets. In comparison to the first half of 2006, profit rose 37.4% during the first six months of 2007 to $39.7 ...

Graybar Sales Up 5.1% in First Half Read More »

New Deal: Home Depot Sells HD Supply for $8.5B

Leave a Comment / Finance, Mergers & Acquisitions, Free, Companies, Top Distributor Sectors, Building Materials/Construction, News, Subscriber Only /

The Home Depot, Atlanta, GA, officially announced a change in terms for its sale of HD Supply, its $12 billion wholesale unit. The retailer will sell the unit to a trio of private equity firms for $8.5 billion, nearly $2 billion from the original agreement of $10.3 billion.
&nbsp ;
In addition, Home Depot will purchase a 12.5% interest in HD Supply for $325 million and will guarantee a $1 billion loan to the buyers.
&nbsp ;
Merrill Lynch, JP Morgan and Lehman Brothers have revised their debt commitment for 100% of the third-party debt financing.
&nbsp ;
The deal will close Aug. 30, 2007.
&nbsp ;
Home Depot expects to net $7.9 billion in cash proceeds from the sale.
&nbsp ;
Despite the softness in the financing and residential construction markets, the ...

New Deal: Home Depot Sells HD Supply for $8.5B Read More »

Lincoln Industrial Acquires Indian Firm

Leave a Comment / Finance, Mergers & Acquisitions, Free, Top Distributor Sectors, News, Subscriber Only /

Lincoln Industrial, a Harbour Group company, has acquired Lincoln Helios Ltd., Bangalore, India.
&nbsp ;
LHI designs and manufactures automatic lubrication systems, ink delivery equipment and related services to clients throughout India. The company serves a variety of industries with demanding operating environments, including wind energy, steel production, mining and printing.
&nbsp ;
Lincoln Industrial, along with its sister companies, Alemite and Reelcraft, designs and manufactures a broad range of automated lubrication systems, dispensing equipment for high viscosity materials, hose cord, and cable reels, and related products for a variety of industrial, commercial, and consumer applications. Based in St. Louis, the company serves its global customer base from 10 ...

Lincoln Industrial Acquires Indian Firm Read More »

Reports: Home Depot Agrees to $8.5B Price Tag

Leave a Comment / Finance, Mergers & Acquisitions, Free, Companies, Top Distributor Sectors, Building Materials/Construction, News, Subscriber Only /

According to news reports, Home Depot Inc., Atlanta, GA, has agreed to sell HD Supply for $8.5 billion, roughly $2 billion less than the originally agreed-upon price.
&nbsp ;
Private equity firms Bain Capital LLC, Carlyle Group and Clayton, Dubilier & Rice will buy the $12 billion wholesale unit after negotiating a lower price. The negotiations were blamed on tighter credit conditions.
&nbsp ;
News reports say Home Depot will finance $1 billion of the purchase and will hold a 13% stake in the unit.
&nbsp ;
Home Depot has not yet made an official ...

Reports: Home Depot Agrees to $8.5B Price Tag Read More »

U.S. Market Analysis: Power Tools

Leave a Comment / Subscriber Only, Research & Analytics, Market Analysis /

The industrial product group listed here - Power Tools - represented a market in 2006&nbsp ; of $1.8 billion, according to estimates by Industrial Market Information, Minneapolis, MN.&nbsp ;

These charts show the top ten industries, by SIC code, consuming these products; and the 2006 end-user consumption of these groups sorted by the nine government market ...

U.S. Market Analysis: Power Tools Read More »

MDM News Digest 3716

Leave a Comment / Subscriber Only, Free /

DXP Enterprises, Inc., Houston, TX, will acquire Precision Industries, Inc., Omaha, NE, for approximately $106 million. The deal nearly doubles the size of DXP. Precision has annualized 2007 sales of approximately $250 million. &nbsp ; DXP's sales in 2006 were $279.8 million. Its sales this year will approach $340 million, based on first-half results. More

LN Acquisition Corp., St. Louis, MO, a Harbour Group company, has acquired Reelcraft Industries, Inc., Columbia City, IN. Reelcraft is a manufacturer of spring-driven hose, cord, and cable reels for use in industrial, automotive, aerospace, military and specialty applications with facilities in the U.S., Canada, England and China. Reelcraft ...

MDM News Digest 3716 Read More »

Commentary: In Private Label, Look for the Sweet Spots

Leave a Comment / Subscriber Only, Strategy, Perspective, Management, Free /

Even if you don't intend to add private label products to your product mix today, pay attention to what competitors are doing and how they position private label against your manufacturer brands.

As our lead article in this issue points out, private label really took off in consumer packaged goods when the industry consolidated. As retailers created national footprints, they gained the scale to effectively build out private label programs.
&nbsp ;
And it certainly requires a certain amount of scale to support the investment into private label - to source, develop and market effectively while not damaging your current lines.
&nbsp ;
In distribution channels, it's important to note that it's not just the national chains that are building private label brands. ...

Commentary: In Private Label, Look for the Sweet Spots Read More »

MAPI: Export Growth Should Balance Out Weaknesses in U.S. Economy

Leave a Comment / Subscriber Only, Research & Analytics, Free, Economic Trends /

In the face of continuing weakness in the housing sector, growth in the U.S. economy is expected to be slower than previously anticipated, according to a new Manufacturers Alliance/MAPI quarterly report.

The Manufacturers Alliance/MAPI Quarterly Economic Forecast forecasts that inflation-adjusted GDP growth, 3.3 percent in 2006, will slow to 1.9 percent in 2007 before regaining some strength, rising to 2.5 percent in 2008.

The housing downturn will likely be more severe, more widespread, and last longer than most analysts expected," said Daniel J. Meckstroth, Manufacturers Alliance/MAPI Chief Economist. "... Manufacturing is buttressed, however, by somewhat better prospects in the trade sector. Exports are expected to perform well in relation to imports and ...

MAPI: Export Growth Should Balance Out Weaknesses in U.S. Economy Read More »

MDM Technology Case Study: Weighing the Cost of a WMS

Leave a Comment / Technology, Strategy, Subscriber Only /

This marine supplies distributor implemented a Warehouse Management System at its single warehouse, significantly cutting shipping errors and improving data collection and sales trend analysis.
&nbsp ;
Lorenz & Jones Marine Distributors Inc., Ankeny, IA, believes in its Warehouse Management System so much that it uses it as a tool to bring in new customers.
&nbsp ;
The distributor invites prospective customers to the 50,000-square-foot warehouse, places a Radio Frequency terminal in their hands, and lets them pick orders. The demonstration illustrates how easy it is to be directed to the right products.
&nbsp ;
Potential customers are sometimes wary because they have had problems with suppliers that regularly shipped the wrong products or the wrong ...

MDM Technology Case Study: Weighing the Cost of a WMS Read More »

Precision President on the Decision to Sell

Leave a Comment / Top Distributor Sectors, Subscriber Only, Power Transmission/Motion Control/Fluid Power, Mergers & Acquisitions, Finance, Companies /

Precision Industries President and COO Chris Circo says the agreed-upon acquisition by DXP Enterprises, Inc., Houston, TX,&nbsp ; was for strategic reasons, and that Precision and its management would continue as usual for the foreseeable future. The deal was not made as an exit strategy for the family.
&nbsp ;
We're still young and we want to keep working as long as we are having fun," Circo says. "This is the business that we want to be in and the business that we grew up in. We think we can continue to do a lot of good for the combined organizations.
&nbsp ;
DXP Enterprises will acquire Precision Industries, Inc., Omaha, NE, for approximately $106 million. The deal nearly doubles the size of DXP.
&nbsp ;
Precision has annualized 2007 sales of approximately $250 ...

Precision President on the Decision to Sell Read More »

Private Label Carries Legal Risks

Leave a Comment / Subscriber Only, Strategy, Research & Analytics, Operations, Management, Legal Issues in Wholesale Distribution /

As the trend of private label among distributors grows, it's important to recognize the legal risks associated with this strategy. If products are sourced from overseas, as many are, wholesalers may end up carrying the ultimate blame or responsibility in a number of situations.

The information provided here is from a National Association of Wholesaler-Distributors legal brief. The brief can be found at NAW's Web site, www.naw.org.

Product Liability
In the U.S., any seller of a private-label or manufacturer-branded product is liable for losses, injury or damage caused by the defective product under strict tort liability.

Normally, a wholesaler-distributor in a U.S. suit will bring the manufacturer of a defective product into the case ...

Private Label Carries Legal Risks Read More »

Private Label: A Balancing Act

Leave a Comment / Subscriber Only, Strategy, Research & Analytics, Management /

The co-author of a new book on private label spoke with MDM recently about how wholesaler-distributors and manufacturers can learn from trends in consumer packaged goods markets.
&nbsp ;
On either the distributor or the manufacturer side, there is no magic bullet" for dealing with the emergence of private-label products, says Nirmalya Kumar, co-author of a new book on the subject, Private Label Strategy: How to Meet the Store Brand Challenge (Harvard Business School Press).

For a distributor, private label requires a difficult balancing act between the needs of customers and those of branded suppliers. For the manufacturer, the emergence of private label in a category requires a strong brand strategy at the end-user without alienating the distributors it ...

Private Label: A Balancing Act Read More »

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!