The 2020 Mid-Year Economic Update_long

Day: June 17, 2008

Wholesale Prices Rise 1.4% in May

Wholesale prices increased 1.4% in May, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported. This rise followed a 0.2% advance in April and a 1.1% increase in March.
At the earlier stages of processing, prices received by producers of intermediate goods rose 2.9% following a 0.9% advance a month earlier, and the crude goods index increased 6.7% after climbing 3.2% in April.
In May, the index for finished energy goods turned up 4.9% after falling 0.2% a month earlier. Prices for finished consumer foods increased 0.8% following no change in April. By contrast, partially offsetting the acceleration in the finished goods index, the rise in the index for finished goods less foods and energy -core inflation -slowed to 0.2% from ...

Reliance Steel Agrees to Buy PNA Group

Private equity firm Platinum Equity, Los Angeles, CA, has agreed to sell PNA Group to Reliance Steel &Aluminum Co., Los Angeles, CA, for $1.1 billion.
PNA Group processes and distributes steel in a variety of forms, including structural beams, tubes, and coiled and rolled steel.
Platinum acquired PNA in May 2006. Following the acquisition, Platinum completed three add-on acquisitions to expand PNA's capabilities: Metals Supply Co., Precision Flamecutting and Steel, and Sugar Steel. PNA's revenue in 2007 was $1.6 billion, up from $1.2 billion at the time of the acquisition.
Platinum Equity has been active in the distribution arena. The firm owns Strategic Distribution Inc., Bristol, PA, and metals distributor Ryerson Inc., Chicago, ...

Ferguson Opens Clearance Center in California

Plumbing &HVAC distributor Ferguson, Newport News, VA, has opened a new clearance center in Pomona, CA. The 7,600-square-foot retail space, in an existing warehouse, offers a selection of high-end bath and kitchen faucet fixtures, sinks, toilets and appliances at reduced prices.
Ferguson's showrooms are designed with homeowners, plumbers, builders, remodelers and designers in mind. Items sold in Ferguson's new clearance center are excess inventory and discontinued material from Ferguson warehouses and showrooms in the Southern California area.
Ferguson is a Wolseley plc company, a UK-based distributor of plumbing, HVAC and building materials. Wolseley operates in 27 ...

Canada M&A Trends Focused on Oil & Gas Sector

Trends in distribution mergers and acquisitions in Canada are generally focused on companies that serve the oil and gas industries, according to panelists in our recent Webcast, Distribution M&A 2008 Update: Value Redefined in a Tough Market."
Jim Miller of Supply Chain Equity Partners told participants that distributors are looking to establish footholds in Western Canada or build on existing business there. PCE Investment Bankers' Jon Skelly agreed, adding that there are risks right now in expanding north of the border. Commodity prices -such as steel -have spiked and exchange rates have grown unfavorable to U.S. businesses buying in Canada. "You acquire a company today at a one-to-one ratio and then all of a sudden exchange rates go back to where they where," he said. ...