As I wrote this 4Q M&A Report introduction, our staff was busy churning out news briefs on a handful of acquisition announcements by distributors and manufacturers. There were so many in the first two weeks of 2023 that we couldn’t always fit all of them in the next MDM Update newsletter.
It’s great to see such movement on the dealmaking front in this industry. M&A has always been a key market driver in distribution, especially after a forgetful 2020 when publicly-traded, privately-owned and independent distributors alike had to reserve capital amid the worst of the COVID-19 pandemic. But the industry quickly rebounded over the past two years, as MDM posted 263 news briefs involving distributor & manufacturer M&A — just above the 258 we had in 2021. And as alluded to earlier, 2023 opened with gangbusters activity to show the appetite for dealmaking is very healthy.
In 2022’s 4Q, MDM published 74 M&A news items — identical to 3Q and down a bit from 78 in 4Q 2021. Get a detailed overview of last year’s activity in our 2022 M&A recap (LINK), as well as my insights into what 2023 may hold as for the pace of activity and the factors involved. As always, this report includes charts illustrating broader domestic M&A activity and median EBITDA transaction multiples for the past 12 months through December. 4Q M&A activity involved many of the usual suspects. Envoy Solutions’ bolt-on tear continued with seven additions announced in the quarter, including seven Michigan-based distributors. Among 2022 Top Distributors, deals were made by: Applied Industrial Technologies, Beacon, BlackHawk Industrial, Bossard, BradyIFS, CED, Crescent Electric, Core & Main, Distribution Solutions Group, Endries International, Ferguson, Graybar, Jon-Don, SBP Holdings, Sonepar, SRS Distribution, US LBM, Winsupply and White Cap.
The January 2023 M&A vigor also demonstrates the value that MDM’s upcoming Virtual M&A Summit will bring. Held from 10 a.m. to 2 p.m. ET on both Feb. 22 and Feb. 23, we’ve assembled an excellent lineup of speakers well-versed in the world of dealmaking in distribution. This includes executive leaders from distributors that have been actively acquiring in recent years, investment banks that have advised on numerous deals in this industry; strategic distribution advisors; and more.
We’ve mapped out this M&A Summit to have something for distributors along each phase of the M&A timeline — whether they are early in prospecting; positioning for investment; integrating with a new company; considering moving to an ESOP; and more. Our agenda will cover the strategic, financial and human capital sides involved with a deal, providing expertise from those who have been through them. I preview the event more thoroughly in this report. We hope to have you in attendance!