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This article is part of the 2012 Distribution Trends Report, an annual update for MDM Premium subscribers. Access the full distribution trends report here.
Along with this diversification, however, is the need for even more technical knowledge. Many of the new products – or even new versions of old products – are more technical or electronic. While it can be a great opportunity for this sector, training will have to be a key focus as well to provide the necessary service that goes with these types of products.
2. Expansion of services. Companies of all sizes are feeling more pressure to expand the services they offer to their customers in order to enhance their value propositions and differentiate themselves from other players in their markets. This has become particularly important for smaller distributors, which increasingly have to compete with larger national companies in their regional and local markets.
3. Oil & gas opportunities. One of the strongest markets for PT/Bearing distributors is the oil & gas industry, which has seen rapid growth with the expansion of shale extraction in various parts of the U.S. Growth in this area is expected to continue, though it may be impacted by regulations.
While several companies in the power transmission sector have been active on the acquisition front, few can match the type of activity we’ve seen from DXP Enterprises. In the first six months of the year, DXP completed six acquisitions with a keen eye on safety products and services: Industrial Paramedic Services (Canada), HSE Integrated Ltd. (Canada), Pump & Power Equipment, Aledco, Force Engineered Products, and Mid-Continent Safety. In 2011, DXP completed two acquisitions: C.W. Rod Tool Company and Kenneth Crosby.
While DXP led the pack in acquisitions, Applied Industrial Technologies hasn’t been quiet. Applied was focused in Canada, completing three acquisitions there since the beginning of 2011. The company also agreed to acquire SKF’s Australian and New Zealand distribution operations.
Kaman and BDI also expanded through acquisitions in 2011.
Average growth for companies on list: 21%
The latest Power Transmission Distributors Association Business Index found that PTDA members expect 2012 to be another year of growth, with an average forecast of 11 percent.