MSC Continues Strong Acquisition Pace with AIS Deal - Modern Distribution Management

Log In

MSC Continues Strong Acquisition Pace with AIS Deal

The deal has several story lines that add to how the 2018 competitive landscape is shaping up.

At a multiple sure to get attention, MSC Industrial Supply Co. (NYSE:MSM), Melville, NY, has acquired All Integrated Solutions (AIS) from the New York private equity firm High Road Capital Partners. AIS is a distributor of industrial fasteners and components, MRO supplies and assembly tools based in Franksville, WI. The deal has several story lines that add to how the 2018 competitive landscape is shaping up.

First, let’s look at the multiple. In an email today, Baird Senior Research Analyst Dave Manthey noted that the purchase price of $86 million implies an EBITDA multiple in the low double-digits. AIS has annual sales of $66 million. (Dave provides a great analysis of the deal; Baird is MDM’s partner in the quarterly MDM/Baird Distribution Survey; to get on the Baird Equity Research email for the industrial distribution sector, email Dave at

Second, there is a great cross-sell fit for MSC with AIS. The deal may not be as eye-popping as MSC’s acquisition of Barnes Distribution North America in 2013, but there are some important parallels. MSC bought Barnes for $550 million; Barnes reported 2012 revenues of $300 million. In this AIS deal, MSC gains share and account access into six upper-Midwest states with a company that has traits of both Barnes and MSC – Class C fastener and vendor-managed inventory solutions, and a metalworking and MRO product portfolio with an emphasis on value-added services.

The deal is a further investment in MSC’s strategy to strengthen its competitive moat against the increasing margin and commoditization pressures of digital channels to provide customized services – to embed the company as a supplier into its customers’ frontline work flows as specialists.

MSC plans to maintain AIS’s operations, providing the company’s customer base access to MSC’s 1.5 million-plus product portfolio to support their full metalworking and MRO needs. Similar to its acquisition of Barnes, MSC will extend AIS’s production fastener and VMI solutions to MSC’s manufacturing customers.

The deal also contains an interesting mix of the industry consolidation themes of family business, private equity and strategic buyers. AIS is an outgrowth of a three-generation family distribution company, with two divisions run by second-generation brothers – All Tool Sales and All Fasteners. In 2013, private equity firm High Road Capital Partners’ portfolio company Accurate Components & Fasteners, New Brighton, MN, acquired All Tool Sales. Though public, MSC has third-generation family leadership in its president and CEO, Erik Gershwind.

This is MSC’s second significant deal in the last year. Last August it bought $100-million industrial distributor DECO Tool Supply, Davenport, IA. And as Manthey noted in his analysis, with an estimated pro-forma leverage ratio still below 1.5x EBITDA, MSC has plenty of financing room for more acquisitions.

Side note on this deal: As a resident of Minnesota for more than two decades (pre-2000) and someone close to upper Midwest industrial distribution markets for closer to four decades, I’m also reminded that this latest MSC deal is another indication of the strength of that region’s highly fragmented manufacturing markets when you consider the Würth Adams platform business out of Minneapolis and many other strong fastener and MRO distributors from Nebraska over to Chicago and beyond.

Related Posts

Share this article

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!


articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events



You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.