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In The News:

MDM News Digest: 3507


In a $250-million cash tender
offer, WinWholesale, Dayton, OH, an equity partner in more than 400 local
distributors across multiple industrial lines, has signed a merger agreement
with Noland Company, Newport News, VA, a $550-million publicly-held,
third-generation family-run distributor of plumbing, electrical, HVAC,
mechanical equipment and supplies in the Southeast. WinWholesale expects to take
Noland private and delist it from the NASDAQ stock exchange. See article here.


In a move that shifts the
competitive landscape for the integrated supply market in North America,
plumbing/PVF distributor Ferguson Enterprises is buying
Kennametal's integrated supply business, Full Service Supply, for
$41 million. FSS reported 2004 revenues of $138.4 million, serving 100 customers
at more than 200 contract sites across 33 states in the USA and one province of
Canada with more than 200 employees. Ferguson's Integrated Systems Division
manages the procurement of $225 million in MRO products/services for 30 plants
nationwide. By most estimates, the deal creates the second largest integrated
supply business behind Bruckner Supply, and unshackles FSS from the inherent
channel conflict Kennametal had to manage against its other distribution
channels. See article here.


It was April Fools Day, but the
calls David Thompson, president of Kennedy Manufacturing, was making were
anything but a joke. After 13 months fighting and negotiating with banks, steel
prices, global competition, service glitches and a lot more challenges, this
long-time U.S. manufacturer of tool storage products emerged from Chapter 11
bankruptcy protection. Many industry watchers had all but written this company
off, and its competitive challenges remain daunting. But the leaned-down company
structure with 200 employees, plus a strong following of distributors and
customers, positions it to rebuild and find new growth niches. Thompson thinks
an underserved industrial maintenance market is a good place to start. See
article here.


Rexnord Corporation, Milwaukee, WI, has
entered into a definitive agreement to purchase the Falk
Corporation from Hamilton Sundstrand, a subsidiary of United Technologies
Corporation for $295 million. The combined companies will have revenues over $1
billion. For most distributors MDM contacted regarding the deal, there is a
mixture of hope and apprehension depending on which products you
sell. See article here.


Canadian oil and gas industry
distributor CE Franklin, Ltd., Calgary, AB, and Smith
International, Inc., Houston, TX, have terminated negotiations relating to
CE Franklin's previously announced proposal to acquire Wilson International,
Inc., Smith's distribution operations. Smith currently owns approximately 55% of
the outstanding shares of CE Franklin and all of the shares of
Wilson. See article here.


February U.S. machine tool
consumption, at $242.10
million, was up 13.5% from January and up 37.9% from $175.52 million reported
for February 2004, according to the Association For Manufacturing Technology and
the American Machine Tool Distributors' Association. With a year-to-date total
of $455.48 million, 2005 was up 28.3% compared with 2004. "Historically, when
February results outpace January, machine tool orders are in an acceleration
mode," said John B. Byrd III, AMT president. "That is why I

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