After numerous acquisitions in recent years, Parts Town wasn’t sneaking up on anyone. But the OEM parts distributor to the foodservice industry still found a way to turn heads this week by announcing a significant bolt-on.
On April 5, the Addison, Illinois-based company said that it had acquired Encompass Supply Chain Solutions, an Atlanta-area-based distributor of OEM repair parts for the home. It marks a considerable market grab for Parts Town, which had catered almost exclusively to foodservice/food retail/commercial kitchen customers prior to 2021.
Parts Town said Encompass brings nearly $200 million in added revenue. It also adds six distribution facilities, nearly 250 employees and over 200 supplier relationships.
It’s not Parts Town’s first foray into the residential parts market, but it’s certainly its biggest. In April 2021, the company announced the acquisition of Dayton Appliance Parts Co., adding a dozen locations across Ohio, Indiana and West Virginia. Terms likewise weren’t disclosed for that deal.
David Webner, group president of Parts Town’s parent company, PT Holdings, said that Parts Town has been “thrilled” with the growth opportunities and supplier partnerships that have emerged from the recent residential parts market entry and that the company is eager to take another step forward with Encompass.
The Encompass acquisition comes about five months after Parts Town gained significant investment from Leonard Green & Partners, L.P., while Berkshire Partners has retained its majority stake in the company. In announcing that added capital this past Nov. 3, Parts Town said the funding would support its rapid international expansion and vision to extend into other mission-critical parts categories that include residential appliance parts, HVAC and laundry parts.
And before that, Parts Town launched its Parts Town Marketplace last September, offering customers a one-stop shopping e-commerce platform for all its current and future product categories, whereas customers previously had to visit multiple websites to make purchases. In hindsight, it was a critical step to expand buying options ahead of the company’s growth into residential.
Encompass’ product portfolio covers replacement parts and accessories for and small appliances, consumer electronics, HVAC, personal care, health and wellness, imaging, tools, gaming accessories, auto accessories, home maintenance, PPE, cooking utensils, surface cleaners, installation supplies and more. Its major brands include Sony, Samsung, LG, Whirlpool, GE, Lenovo, Panasonic, Electrolux, Philips and others.
Encompass itself has grown rapidly over the past two years. In March 2022 alone, the company opened its fifth distribution center — a new 50,000-square-foot facility just outside of Cincinnati, Ohio; was appointed an authorized distributor of Bosch home appliance parts; and integrated and connected with Rossware Computing’s business management system for streamlined appliance parts purchasing. Those developments followed a handful of deals Encompass landed for parts supply and support service across leading consumer brands.
The Big Picture
The Encompass and Dayton deals ensure that Parts Town will no longer be known just for its foodservice products and services. With added financial backing, a sleek e-commerce marketplace platform and a whole new residential market to serve, expect to see the distributor gain considerable market share in the years ahead.
We’ll be watching specifically to see if Parts Town explores expansion into any other product categories, such as industrial MRO, which seems like a logical complement to its current portfolio. Some of its products are already in tangential categories of plumbing, HVAC, JanSan, HVAC and tools.