The 2020 Mid-Year Economic Update_long

Day: August 9, 2007

Home Depot in Talks to Restructure HD Supply Deal

The Home Depot, Atlanta, GA, announced it is in discussions with Bain Capital Partners, The Carlyle Group and Clayton, Dubilier & Rice with the aim of restructuring their agreement for the sale of HD Supply.
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These discussions could result, among other things, in a reduction in the $10.3 billion purchase price. The announcement&nbsp ; may be a result of tightening credit markets,&nbsp ; which would make it more difficult to raise the cash needed to buy the unit.

No other details on the discussions were released.
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In mid-June, Home Depot announced it would sell its wholesale division, a $12 billion unit, to the trio of private equity firms for roughly 10X-12X EBITDA. Read the original article here. ...

Marriages of Manufacturers, Distributors a Difficult Balancing Act

A few events do not make a trend. But I've noticed a few instances lately where manufacturers have bought up distribution in select markets. Examples: In July, a Swedish manufacturer of seals, Trelleborg, acquired AFM in Portland, OR, a $13-million distributor. HVAC manufacturer Carrier Corp. announced in June it was buying a $150-million distributor serving northern California and Nevada, E.B. Ward and Valair, with 140 employees.

It stirs memories of the difficult balancing act and sometimes rocky road cutting tool manufacturer Kennametal found when it operated an industrial distribution division while also managing independent distribution networks. It finally spun off its distribution units.

The reason given by Carrier for its purchase of distribution: The ...

Applied Industrial Sales Up 6% in Fiscal 2007

Applied Industrial Technologies, Cleveland, OH, reported sales for its fiscal year ended June 30, 2007, increased 6% to $2 billion. Profit for the year rose 19% to $86 million, versus $72 million in the prior year.
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Sales for the fourth quarter were up 4.7% to $528 million from the prior-year period. Profit increased 22.2% to $24.6 million.
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Applied reported that the housing industry slump has had an impact on some of its related markets; the sluggish performance" by the automobile manufacturing sector also negatively impacted the distributor's performance.
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Applied Industrial Technologies is an industrial distributor to MRO and OEM customers in virtually every ...

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