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MSC Industrial Direct Co., Inc., Melville, NY, No. 11 on MDM's list of top industrial distributors, has signed a definitive agreement to acquire the North American distribution business of the Barnes Group Inc. (NYSE: B). Barnes Distribution is No. 22 on the list of top industrial distributors. With this acquisition, MSC adds a highly complementary provider of fasteners and other high margin consumable products and services, including a vendor managed inventory solution.
The acquisition's purchase price will be $550 million and the asset purchase structure results in significant future tax benefits with a net present value estimated to be more than $100 million. Run-rate cost synergies are expected to reach $15-$20 million by fiscal 2015.
Headquartered in Cleveland, OH, Barnes Distribution North America has a broad distribution footprint throughout the U.S. and Canada with customers across manufacturing, government, transportation and natural resources end-markets. BDNA had unaudited sales of roughly $300 million for calendar year 2012.
The BDNA business results currently comprise the majority of the company's distribution segment. The remaining business within the distribution segment, Associated Spring Raymond, will be realigned into the company's industrial segment.
"BDNA is a high quality business with a first rate team, a compelling product offering, strong customer value proposition and a broad geographic foot print including Canada," said Erik Gershwind, MSC CEO and president. "This acquisition furthers our strategy to build adjacent product expertise and deepens our connection to customers with in-plant solutions, thereby improving customer retention. We will sell MSC's product offering through BDNA's sales force and sell BDNA's products and inventory management solution to MSC's customers."