March 2008 - Modern Distribution Management

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March 2008

Tennant Company Buys Alfa

Tennant Company, Minneapolis, MN, has completed its acquisition of Sociedade Alfa Ltda., maker of the Alfa brand commercial cleaning machines.
Sociedade Alfa Ltda., Sao Paulo, Brazil, with 2007 revenues of roughly $9 million, manufactures and sells commercial cleaning equipment that includes commercial ride-on scrubbers, ride-on sweepers and walk-behind scrubbers.
This is the second acquisition announced by Tennant Company in 2008. The company recently announced its acquisition of Applied Sweepers, maker of Green Machines® brand outdoor cleaning equipment, based in Falkirk, Scotland.
Tennant has manufacturing operations in Minneapolis, MN; Holland, MI; Uden, The Netherlands; Northampton, United Kingdom; and Shanghai, China; and sells products ...

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Rexel CEO: Hagemeyer Deal Makes Rexel Stronger

Now that Rexel has completed its purchase of Dutch electrical distributor Hagemeyer NV, the next step in the deal -to sell Hagemeyer's North American, Asian-Pacific and some European assets to competitor Sonepar -will take place in the next six months, Rexel CEO Jean-Charles Pauze said.
Pauze was commenting in an online video interview, posted by the company through the EuroBusiness Media site. (Interview, Transcript)
Pauze said the combination of Rexel and Hagemeyer is "historic." "Not only are we reinforcing our position worldwide, but we are becoming a very strong No. 2 in ...

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ERIKS Makes Counteroffer for Econosto

ERIKS group nv has made an offer for valve manufacturer Royal Econosto N.V. for €7.80 in cash per share, or €126 million (about US$200 million with current exchange rates). The bid counters an offer from buyout firm Gilde Buy Out Partners BV of €7.25 a share.
According to a Bloomberg report, Gilde has five days to make a counteroffer.
Econosto has two divisions: flow and sealing technology (the production, sale and distribution of valves, gaskets, sealing products, hoses, couplings, instrumentation systems, chemical seals, etc.); and Comfort and Environmental Technology (production and sale of domestic and industrial HVAC and energy systems and services.)
ERIKS supports Econosto's international growth strategy and the proposed ...

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HD Supply Waterworks Acquires D&M Fabrication

HD Supply Waterworks, an HD Supply business that distributes a line of water, sewer, fire protection and storm drain products to serve contractors and municipalities in the water, wastewater, storm and fire protection markets, has finalized the purchase of D&M Fabrication, Inc., Lodi, CA.
D&M Fabrication, Inc. specializes in fabricating fire protection systems for distributors and contractors who design, sell and/or install systems for end users.
D&M Fabrication has an exceptional, best-in-class reputation for high-quality fabricated fire protection systems and has been a partner of HD Supply Waterworks for nearly a decade," said HD Supply Waterworks Regional Vice President Chuck Reed. "This acquisition is extremely important for us because it will solidify our ...

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Ryan Will Be CEO of Grainger as of June 1

James T. Ryan, Grainger's president, will add the title of CEO effective June 1, 2008. He will succeed Richard L. Keyser, who will remain with the Chicago, IL-based facilities maintenance distributor as chairman of the board.
Ryan was named Chief Operating Officer and appointed to the Board of Directors in February 2007. He became president of Grainger in 2006.
Ryan has served Grainger in increasingly responsible roles in virtually every part of the company since joining the company in 1980. He graduated from Miami University, Oxford, OH, in 1980 with a Bachelor of Science degree in business. He also earned a master's degree in business administration with distinction from DePaul University in Chicago.
Grainger, with 2007 sales of $6.4 billion, is a ...

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Graybar Debuts Security Catalog

St. Louis, MO-based Graybar, a distributor of electrical and communications products, has published a new catalog of security products.
The GraybarSecurity Solutions Catalog will debut at two upcoming events in Las Vegas, NV -AFCOMâDataCenter WorldâSpring 2008 and ISC West. The 132-page catalog features more than 1,400 products from 44 brand-name suppliers in six categories: surveillance; access control; intrusion; audiovisual notification; cabling, installation and tools; and fire systems. It also includes products incorporating the latest IP technology solutions.

A pdf of the catalog is available for viewing or download from the Markets Served -Security section of ...

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Distributor PSS World Sells Some of athenahealth Holdings

PSS World Medical, Inc., Jacksonville, FL, has sold a portion of its shares of athenahealth, Inc., a provider of Internet-based healthcare information technology and business services to physician practices. The company had purchased approximately 1.5 million shares of athenahealth, Inc. prior to its initial public offering in September 2007.
David A. Smith, Chairman and Chief Executive Officer of PSS World Medical, Inc., said: The athenahealth product is a great fit for our customers, especially in this era of declining physician incomes. We invested several million dollars in training, education, and rollout for this long-term relationship that is now offset by the partial monetization of our stock holdings. We are looking forward to a very good year with athenahealth and ...

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Illinois Tool Works Acquires Vitronics Soltec

Illinois Tool Works Inc., Glenview, IL, has acquired VS Acquisition Holding Inc., the parent company of Vitronics Soltec Corp., Stratham, NH, a global manufacturer of equipment, software and related services used in the soldering of printed circuit boards and the packaging of semiconductor devices.
VS Acquisition Holding Inc. will be a wholly owned business unit of ITW and part of the company's existing power systems and electronics businesses. ITW will continue to operate VS Acquisition Holding Inc. as a separate business under the Vitronics Soltec brand name.
Vitronics Soltec has affiliates in Oosterhout, Holland and Suzhou, China. Direct sales and support centers are in the U.S., Holland, Germany, Singapore, Malaysia, Korea and Shanghai.
ITW is ...

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MSC Industrial Launches Largest Safety Product Catalog in Its History

MSC Industrial Direct Co., Inc., Melville, NY, has launched its largest Safety Products Catalog in its company history. The new catalog has 40,000 products, a 50% increase in SKUs since the company's 2005 catalog. The catalog will be sent to a customer base five times larger than the customer base receiving the 2005 catalog.
We believe there are two key factors that account for the growth in our safety business," says Erik Gershwind, MSC's senior vice president of product management and marketing. "First we worked closely with our customers to develop the exact type of product mix and safety resource they wanted, and second, our strategic supplier relationships allow MSC to provide cutting edge, industry-leading safety products to our customers."
Anthony Testa, ...

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ERIKS Acquires 2 Companies in Poland

The ERIKS group has agreed to acquire two companies in Poland: TIM Sp.j.w. with three branches in the industrial region of Poznan, and Hydro-met s.c., based in Gdynia.
The two companies sell sealing components, mechanical power transmission products and maintenance products to OEMs as well as the MRO market. Together the companies have 18 employees.
This acquisition is in line with the ERIKS' strategy to expand its activities in the growing industrial regions in Poland and to further strengthen its market position in Poland for sealing elements. ...

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Rexel Now Owns 98.6% of Hagemeyer

Paris-based Rexel now owns 98.67% of Hagemeyer NV, and shares of Hagemeyer will no longer be publicly traded as of mid-April, the companies announced.
In November 2007, Rexel and Hagemeyer reached an agreement for Rexel to buy the Dutch electrical distributor for roughly US$4.5 billion. Rexel has agreed to sell Hagemeyer's North American, Asian-Pacific and select European businesses to Sonepar.
The overall transaction combines the strengths of three major players in the distribution of electrical supplies. The transaction will broaden Rexel's footprint across Europe, while significantly consolidating Sonepar's positions in North America and ...

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Final GDP Growth Estimate: 0.6% for Fourth Quarter

Real gross domestic product -the output of goods and services produced by labor and property in the U.S. -increased at an annual rate of 0.6% in the fourth quarter of 2007, according to final estimates released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.9%.
The GDP estimates released today are based on more complete source data than were available for the preliminary estimates issued last month. In the preliminary estimates, the increase in real GDP was also 0.6%.
The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential structures, state and local government spending, and equipment and software that were largely offset by ...

Final GDP Growth Estimate: 0.6% for Fourth Quarter Read More »

Illinois Tool Works Agrees to Buy Quipp

Illinois Tool Works Inc. has agreed to acquire Quipp Inc., Miami, FL, for between $4.30 and $5.65 per share in cash.
Quipp, through its operating subsidiary Quipp Systems Inc., designs, manufactures and installs material handling systems and equipment to facilitate the automated inserting, assembly, bundling and moving of newspapers from the printing press to the delivery truck.
ITW is a diversified manufacturer of highly engineered components and industrial systems and consumables with 825 business units in 52 ...

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Graybar Tops Most Admired List for Diversified Wholesalers

St. Louis, MO-based Graybar, a distributor of electrical and communications products, has achieved the No. 1 ranking on the annual FORTUNE America's Most Admired Companies"list in the Wholesalers: Diversified industry category.
The list is featured in the March 17 issue of FORTUNE.
Rounding out the top five on the diversified wholesalers list were Grainger at No. 2, Reliance Steel &Aluminum (3), Genuine Parts Co. (4), and Anixter International (5).
The top four for foodservice: CHS (1), Sysco (2), Performance Food Group (3), and United Natural Foods (4).
Henry Schein was No. 1 on the healthcare distributor list, with McKesson, Cardinal Health and PSS World Medical rounding out that top four.
Find more at the FORTUNE Most ...

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Durable Goods Orders Fell in February

Durable goods orders fell 1.7% in February, with nondefense capital goods orders excluding aircraft falling 2.6%, according to the U.S. Census Bureau. More details here.
"A scenario of economic uncertainty and tightened credit availability, amid high and rising costs for energy and other commodities, is not a conducive environment for business investment in capital equipment,"said Daniel Meckstroth, chief economist for the Manufacturers Alliance/MAPI. 

"…  Manufacturing capacity utilization is declining, and the indicator of slack in the nonindustrial economy, the unemployment rate, is rising. The need for domestic capacity is waning. An important support for the industrial equipment sector is that ...

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Electrical Manufacturer Confidence Index Up

NEMA's Electroindustry Business Confidence Index (EBCI) for current North American conditions rose for a second straight month in March. Still, at 47.9, the index again lagged the 50-point threshold indicative of industry expansion. Indeed, March was the fourth consecutive month in which the index failed to top 50 points.
For more information, click here. ...

Electrical Manufacturer Confidence Index Up Read More »

HD Supply Utilities Opens New Headquarters

HD Supply Utilities recently opened its newly completed headquarters and branch warehouse in Orlando, FL.
The new facility houses the HD Supply Utilities Orlando branch and a 52,000-square-foot warehouse with hurricane-proof tilt walls, allowing the business to serve its customers'emergency response needs.
HD Supply Utilities offers products for the distribution, transmission and generation of electric power.
HD Supply Utilities is a business of HD Supply, a wholesale distribution company focused solely on products and services to professional customers in the infrastructure &energy, maintenance, repair and improvement and specialty construction markets. HD Supply has 1,000 ...

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Backed By Private Equity

This article looks at the impact of private equity on the industrial distribution market. The impact can be seen in other distribution sectors, as well. The author says that increased private equity ownership has fundamentally changed the corporate and strategic landscape of the distribution industry.

Worldwide M&A activity reached a record $3.8 trillion over the first nine months of 2007, according to Dealogic.

Much of the activity was directly attributed to private equity firms, which raised nearly $200 billion worldwide during the year. In particular, industrial distribution experienced unprecedented private equity investment.

Over the last two years, 21 private equity firms have made 46 platform and add-on investments in numerous sub-sectors ...

Backed By Private Equity Read More »

McKesson May Face Treble Damages in Class-Action

McKesson Corp. must face a class-action lawsuit filed by consumers and third-party payers claiming the drug distributor illegally inflated the wholesale price of prescription medicines, according to a recent court ruling by a U.S. District Court. The class action was certified on Wednesday.
The judge initially certified the suit in August 2007, but not for damages, which the most recent ruling includes. Attorneys estimate that damages on behalf of consumers could total from $200 to $800 million and damages on behalf of third-party payers will exceed $5 billion.
The lawsuit claims McKesson violated the federal Racketeer Influenced and Corrupt Organizations (RICO) act, and if found guilty, could be forced to pay treble damages.

The suit, originally ...

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Parker Hannifin Files Anti-Dumping Petition

Parker Hannifin Corp., supplier of motion and control technologies, filed a petition with the U.S. Department of Commerce and the International Trade Commission alleging unfair competition from the dumping of valves used in air conditioning systems by two manufacturers in China.

Specifically, the petition alleges that Sanhua group and DunAn group have and continue to sell front-seating service valves for residential air conditioners into the U.S. market at prices below their cost of production in China. Parker is petitioning for dumping penalties which will help to restore fair trade in the U.S. market.
Parker, which maintains operations in 43 countries, has annual sales of more than $10 ...

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