The janitorial and foodservice packaging markets saw their importance significantly elevated throughout the COVID-19 pandemic, and perhaps because of that, a few key privately-held distributors have experienced tremendous growth over the past year by means of acquisition. That certainly continued in 2022’s third quarter. (Read more in MDM’s 3Q M&A report.)
Envoy Solutions, Imperial Dade and BradyIFS — each earning a spot on MDM’s 2022 Top JanSan Distributors list — comprised a major chunk of another very busy M&A quarter for the distributors and manufacturers in the industrial, commercial and construction markets on MDM’s radar, and it carried into October. At least one of those three firms have seemingly announced an acquisition every week for the past quarter, and there’s no sign that they’ll slow down.
Formerly known as Waxie Sanitary Supply and based in Glenview, Illinois, Envoy Solutions announced four deals in 3Q before sharing Oct. 5 that it had gained another seven companies by acquiring Michigan-based Enterprises Group.
Jersey City, New Jersey-based Imperial Dade announced the addition of five companies between Aug. 5 and Oct. 10, marking 56 acquisitions for the company since chairman Robert Tillis and CEO Jason Tillis became its leaders in 2007.
Meanwhile, BradyIFS — formed through the late 2020 merger of Brady Industries and Individual FoodService — made a landmark acquisition this past July by adding Hill & Marks, a U.S. northeast distributor that charted on MDM’s 2021 Top JanSan Distributors. That deal pushed BradyIFS’ annual revenues above $1.3 billion.
Beyond JanSan, major deals in the markets we cover included Wesco buying IT distributor Rahi for $217 million; Timken buying GGB Bearing for $200 million; Sonepar USA adding electrical distributors PEPCO and Basin-River; Avient selling its distribution unit for $950M (pending approval); RS Group buying Mexico’s Largest Rockwell Distributor, Risoul y Cia, S.A. de C.V. (Risoul) for $275 million; 3M divesting its $8.6 billion health care unit; Pentair buying commercial ice maker Manitowac Ice for $1.6 billion; and Stanley Black & Decker completing the $3.2B sale of its Security unit. Get details on those and many more deals via our monthly recaps in the pages ahead.
Overall, we at MDM posted news of 23 M&A items in July; 26 in August; and 25 in September. The combined 74 news items outpaced the 67 from 2Q, which was a considerable increase from 1Q. It’s interesting that these past two robust quarters contrast with the downtrend since 4Q 2021 seen in the broader M&A activity levels across all industries provided by investment bank Houlihan Lokey. Meanwhile, the median EBITDA transaction multiples for the last 12 months through September for all industries is 10.0x, down from 2021’s 10.4x. Excluding 2020 (9.3x), 2022’s average notably trails the 10.6x to 11.0x seen across 2017-2019.