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Brazos Private Equity Partners LLC, Dallas, has agreed to acquire for $81 million ORS Nasco Inc., the Muskogee, OK-based wholesale distribution business of Unidare plc, of Dublin, Ireland. That price represents a 7X multiple on the company's FY 05 EBITDA of $11.6 million. ORS Nasco announced fiscal year 2005 sales of $216.8 million, up 17 percent from $184.9 million in FY2004. EBITDA growth in 2005 was 43 percent on $8.1 million in FY2004. The company has focused on wholesaling products in the industrial, welding, safety, construction, rental, and oilfield services sectors. ORS Nasco only sells to distributors. See article p. 3 of this section.
September U.S. machine tool consumption totaled $294.84 million, down 2.4% from August and down 20.5% from the total of $370.66 million reported for September 2004, according to the American Machine Tool Distributors' Association and the Association for Manufacturing Technology. With a year-to-date total of $2,280.56 million, 2005 was up 10.2 percent compared with 2004. The numbers in this report are based on the totals of actual data reported by companies participating in the USMTC program. See article p. 4 of this section.
3M Co. will merge its industrial and transportation units, effective Jan. 1, 2006. The combined unit will be headed by Hak Cheol Shin, currently in charge of the industrial unit. The decision leverages common markets and customers, as well as common channels, technologies, manufacturing base and selling processes, according to a 3M press release. Combination of the Industrial and Transportation Business coincides with Harold J. Wiens' announced retirement. Wiens is executive vice president for transportation business.
Plumbing and heating distributor Wolseley plc is acquiring two more distributors for a total of $6.8 million in cash: one in the U.S. and the other in France. On Nov. 14, Wolseley subsidiary Ferguson acquired HVAC distributor Mobile Supply Company Inc., Mobile, AL. Mobile Supply has branches in Mobile, AL, and Pensacola, FL, and had sales of $12.3 million in 2004. On Nov. 18, Wolseley subsidiary PBM signed an agreement to acquire MSCO, a generalist builders' merchant based in the southwest of France with two branches. MSCO had sales of $4.37 million in 2004. Since the beginning of the fiscal year started Aug. 1, 2005, Wolseley has bought 17 distribution businesses in Europe and North America, investing a total of about $729 million in cash. Wolseley had $19.45 billion in sales in fiscal year 2004.
Wolseley plc's John Whybrow told shareholders at this week's annual meeting that the London-based company's U.S. businesses have "made an excellent start to the year" and continue to achieve strong organic growth. He said the housing market remains strong, but that the number of housing starts may reduce as a result of higher interest rates. He added however that the U.S. lumber and structural panels prices have softened since year end, as anticipated. The Canadian market is expected to remain strong, as well, he said, although the new residential housing market may fall slightly from recent high levels. Gross margins there, he said, continue to be affected by competitive pricing pressure.
Hughes Supply Inc., Orlando, FL, reported an increase of 35 percent in profit and an increase of 28% in net sales in the third quarter of fiscal year 2006 ended Oct. 31, 2005. Sales for the third quarter were $1,493.5 million, the highest in the company's history, and an increase from $1,167.5 million in the same period last year. Profit grew to $45.7 million compared with $33.8 million in the previous year's third quarter. Net sales for the nine months ended Oct. 31 grew 23 percent to $4,066.2 million, compared with $3,303.4 million last year, with organic sales growth of 11 percent. For the nine months ended Oct. 31, net income grew 15 percent to $118.9 million, compared with $103 million last year.