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Hagemeyer is now taking steps to resolve its financial problems, which have done much to keep the rumor mill churning this year. The announcement conjures up some of the residual heartburn that the era of roll-ups and dot-coms brought to this industry. There were many fast and furious deals inked that had everything going to meteor to the top except a strong value proposition to a customer base.
Hagemeyer's entry into North America was a little different. It bought into some very strong companies at a bad time, given 20-20 hindsight, albeit at estimated prices that today seem to be a premium. Not so at the time, in 1999 and 2000, when there was still strong M&A momentum in this industry and a strong economy to support it. The company's latest announcement indicates it can now focus on dusting itself off to be a competitive factor in the year ahead.
Hughes Supply's acquisition of Century Maintenance (details in this issue) may show that new growth can emerge after devastating fires. The numbers on the deal lead outsiders to conclude this is a well-managed company with a strong value proposition into an expanding customer base. It's a model that Hughes can use to examine its future and stretch beyond its traditional markets to find new growth.
That's likely to be the theme for many distributors this year as they find organic and acquired growth opportunities from the ashes of this recession. The industry has not seen the last of the fallout from this recession, by any means.