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Top Distributor Sectors
Reports: Home Depot Agrees to $8.5B Price Tag
According to news reports, Home Depot Inc., Atlanta, GA, has agreed to sell HD Supply for $8.5 billion, roughly $2 billion less than the originally agreed-upon price.
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Private equity firms Bain Capital LLC, Carlyle Group and Clayton, Dubilier & Rice will buy the $12 billion wholesale unit after negotiating a lower price. The negotiations were blamed on tighter credit conditions.
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News reports say Home Depot will finance $1 billion of the purchase and will hold a 13% stake in the unit.
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Home Depot has not yet made an official ...
Top Distributor Sectors
Lincoln Industrial Acquires Indian Firm
Lincoln Industrial, a Harbour Group company, has acquired Lincoln Helios Ltd., Bangalore, India.
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LHI designs and manufactures automatic lubrication systems, ink delivery equipment and related services to clients throughout India. The company serves a variety of industries with demanding operating environments, including wind energy, steel production, mining and printing.
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Lincoln Industrial, along with its sister companies, Alemite and Reelcraft, designs and manufactures a broad range of automated lubrication systems, dispensing equipment for high viscosity materials, hose cord, and cable reels, and related products for a variety of industrial, commercial, and consumer applications. Based in St. Louis, the company serves its global customer base from 10 ...
Research & Analytics
Private Label: A Balancing Act
The co-author of a new book on private label spoke with MDM recently about how wholesaler-distributors and manufacturers can learn from trends in consumer packaged goods markets.
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On either the distributor or the manufacturer side, there is no magic bullet" for dealing with the emergence of private-label products, says Nirmalya Kumar, co-author of a new book on the subject, Private Label Strategy: How to Meet the Store Brand Challenge (Harvard Business School Press).


For a distributor, private label requires a difficult balancing act between the needs of customers and those of branded suppliers. For the manufacturer, the emergence of private label in a category requires a strong brand strategy at the end-user without alienating the distributors it ...
Research & Analytics
Private Label Carries Legal Risks

As the trend of private label among distributors grows, it's important to recognize the legal risks associated with this strategy. If products are sourced from overseas, as many are, wholesalers may end up carrying the ultimate blame or responsibility in a number of situations.

The information provided here is from a National Association of Wholesaler-Distributors legal brief. The brief can be found at NAW's Web site, www.naw.org.

Product Liability
In the U.S., any seller of a private-label or manufacturer-branded product is liable for losses, injury or damage caused by the defective product under strict tort liability.

Normally, a wholesaler-distributor in a U.S. suit will bring the manufacturer of a defective product into the case ...

Top Distributor Sectors
Precision President on the Decision to Sell
Precision Industries President and COO Chris Circo says the agreed-upon acquisition by DXP Enterprises, Inc., Houston, TX,&nbsp ; was for strategic reasons, and that Precision and its management would continue as usual for the foreseeable future. The deal was not made as an exit strategy for the family.
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We're still young and we want to keep working as long as we are having fun," Circo says. "This is the business that we want to be in and the business that we grew up in. We think we can continue to do a lot of good for the combined organizations.
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DXP Enterprises will acquire Precision Industries, Inc., Omaha, NE, for approximately $106 million. The deal nearly doubles the size of DXP.
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Precision has annualized 2007 sales of approximately $250 ...
Subscriber Only
MAPI: Export Growth Should Balance Out Weaknesses in U.S. Economy
In the face of continuing weakness in the housing sector, growth in the U.S. economy is expected to be slower than previously anticipated, according to a new Manufacturers Alliance/MAPI quarterly report.


The Manufacturers Alliance/MAPI Quarterly Economic Forecast forecasts that inflation-adjusted GDP growth, 3.3 percent in 2006, will slow to 1.9 percent in 2007 before regaining some strength, rising to 2.5 percent in 2008.

The housing downturn will likely be more severe, more widespread, and last longer than most analysts expected," said Daniel J. Meckstroth, Manufacturers Alliance/MAPI Chief Economist. "... Manufacturing is buttressed, however, by somewhat better prospects in the trade sector. Exports are expected to perform well in relation to imports and ...
Free
MDM News Digest 3716
DXP Enterprises, Inc., Houston, TX, will acquire Precision Industries, Inc., Omaha, NE, for approximately $106 million. The deal nearly doubles the size of DXP. Precision has annualized 2007 sales of approximately $250 million. &nbsp ; DXP's sales in 2006 were $279.8 million. Its sales this year will approach $340 million, based on first-half results. More

LN Acquisition Corp., St. Louis, MO, a Harbour Group company, has acquired Reelcraft Industries, Inc., Columbia City, IN. Reelcraft is a manufacturer of spring-driven hose, cord, and cable reels for use in industrial, automotive, aerospace, military and specialty applications with facilities in the U.S., Canada, England and China. Reelcraft ...
Research & Analytics
U.S. Market Analysis: Power Tools
The industrial product group listed here - Power Tools - represented a market in 2006&nbsp ; of $1.8 billion, according to estimates by Industrial Market Information, Minneapolis, MN.&nbsp ;


These charts show the top ten industries, by SIC code, consuming these products; and the 2006 end-user consumption of these groups sorted by the nine government market ...
Subscriber Only
MDM August 25, 2007
This is the pdf of this issue of Modern Distribution Management. Apply the full $24.95 pay-per-view cost toward an annual subscription (within 30 days of purchase), which includes two issues a month plus access to more than six years of online archives and market data. Call 1-888-742-5060 or email info@mdm.com to ...
Finance
Report: Banks Reluctant to Lend Money in HD Supply Deal
According to news reports, Home Depot negotiations with a trio of private equity firms that had agreed to buy HD Supply are still in the works. The parties could lower the price by at least $1 billion, or the sale could fall through, Bloomberg reports.
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Apparently, the banks involved -Merrill Lynch & Co, JPMorgan Chase & Co. and Lehman Brothers Holdings Inc. -are reluctant to lend the money to enable the buy due to a tightening credit market.
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The deal for the $12 billion unit was scheduled to close Thursday, but no parties have announced a resolution.

More on M & A trends in distribution&nbsp ; can be found in the MDM Special Report: Distribution M & A 2007 Update. Or&nbsp ; ...
Finance
Precision President: DXP Deal a Strategic Move for Family-Run Company

Precision Industries President and COO Chris Circo says the agreed-upon acquisition by DXP Enterprises, Inc., Houston, TX,&nbsp ; was for strategic reasons, and that Precision and its management would continue as usual for the foreseeable future. The deal was not made as an exit strategy for the family.
&nbsp ;
We're still young and we want to keep working as long as we are having fun," Circo says. "This is the business that we want to be in and the business that we grew up in. We think we can continue to do a lot of good for the combined organizations."

DXP Enterprises will acquire Precision Industries, Inc., Omaha, NE, for approximately $106 million. The deal nearly doubles the size of DXP.

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Precision has annualized 2007 sales of approximately ...
Free
Goodyear Engineered Products Now Veyance
Post-acquisition by The Carlyle Group, Goodyear Engineered Products, Akron, OH, has changed its name to Veyance Technologies Inc.
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The company will continue producing Goodyear Engineered Products brand industrial, military and automotive products.
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The company's management team remains in place.
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In other news, the new Veyance has strengthened its North America position in the conveyor belt industry with the purchase of the former Industrial Specialty Fabrics of
Hogansville, GA. The operation has been renamed Specialty Fabrics & Converting ...
Finance
Report: No Agreement Yet in HD Supply Negotiation
The Financial Times has reported that the buyers of HD Supply want a more than $1 billion price cut to the agreed-upon $10.3 billion purchase price. The parties recently moved the closing date for the sale by Home Depot&nbsp ; back to Thursday, Aug. 23 -tomorrow.
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The paper reported that one market investor expects the new price could be closer to $8.5 billion, a sentiment echoed earlier this month by industry analysts.
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At the original price of $10.3 billion, the buyers would have paid 10X-12X EBITDA. Tightening credit markets forced the deal-makers back to the table.
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The buyers would have to pay a $310 million break-up fee if they decide to walk away from the deal, FT said.
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Home ...
Metals Service Centers
Samuel, Son & Co. Expands to UK
Metals distributor Samuel, Son & Co. Ltd., Mississauga, Ontario, Canada, has signed a joint venture agreement with Generation Metals International Ltd., Reading, England.
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The new company, Samuel, Son & Co. (UK) Ltd., expands the Canadian distributor to the UK. In a release, the company said: This partnership will enhance our commitment to Eclipse Aviation Corporation as the metal service provider for raw materials outside of the U.S."
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The new company will open a 23,000-square-foot facility north of Birmingham focused on processing a range of aerospace raw material metallic commodities with attention to aerospace aluminum plate products.
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Samuel, Son & Co. has 110 branches strategically located throughout North America. ...
Finance
Celanese Sells AT Plastics Films Business
Celanese Corporation, Dallas, TX, a hybrid chemical company, has sold the Films business of its AT Plastics subsidiary to British Polythene Industries plc. The Films business manufactures products for the agricultural, horticultural and construction industries.
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The sale is part of Celanese's plan to divest non-core businesses.
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The Specialty Polymers business of AT Plastics, whose production and support facilities are located in Edmonton, remains with Celanese. The Polymers business concentrates on the development and supply of specialty resins and ...
Economic Trends
Canada Wholesale Revenues Up Slightly in June
Source: Statistics Canada

Wholesale sales in Canada grew only slightly in June (+0.2%), as increased sales of other products" were largely offset by a decrease in the automotive sector. Excluding the automotive sector, sales grew&nbsp ; 0.6%.
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Wholesale sales for the second quarter were down for the first time in nearly four years. This contraction was largely attributable to the automotive sector.


In June, increases were observed in the "other products" sector (+2.8%), the machinery and electronic equipment sector (+1.0%) and the farm products sector (+6.0%). These advances, however, were partially offset by contractions in the automotive sector (-1.6%) and the personal and household goods sector (-0.8%).

In constant prices, ...
Economic Trends
2Q Shipments in Canada Up 0.7%
Source: Statistics Canada
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Manufacturing shipments in Canada tumbled in June, falling&nbsp ; 1.8% to&nbsp ; $48.6&nbsp ; billion. This was the largest decrease since January and the third consecutive monthly decline.


Despite these decreases, second-quarter shipments still managed to gain&nbsp ; 0.7% compared with the first quarter of&nbsp ; 2007. This was due to high shipment levels at the start of the second quarter after a particularly strong March. Examining the first six months of this year, manufacturing shipments were up&nbsp ; 0.1% compared with the first six months of&nbsp ; 2006.
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Using constant dollars, which take price fluctuations into account, the volume of manufacturing shipments decreased&nbsp ; 1.7% in June to&nbsp ; ...
Finance
DXP Enterprises to Buy Precision Industries for $106M
DXP Enterprises, Inc., Houston, TX, will acquire Precision Industries, Inc., Omaha, NE, for approximately $106 million. The deal nearly doubles the size of DXP.
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Precision has annualized 2007 sales of approximately $250 million. &nbsp ; DXP's sales in 2006 were $279.8 million. Its sales this year will approach $340 million, based on first-half results.
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Precision is a family-owned national industrial distributor with&nbsp ; about 45%&nbsp ; of its business in integrated supply, according to Precision's spokesperson. It has 160 locations. Precision has made at least five acquisitions since 2001, according to its Web site, and has greatly expanded its network nationwide in the past five years.
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Precision sells abrasives & cutting tools, bearings, ...
Free
Hagemeyer Sales Up in First Half
Hagemeyer NV reported organic revenue growth of 5.7% in the first half of 2007 compared with the first half 2006.
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Revenue was 3,117 million euro (US$4,207 million). Profit nearly doubled from the same period a year ago.
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Hagemeyer saw growth in all regions except North America, where organic sales in PPS were down 4.6% in the first half 2007. Sales in Professional Products and Services (Hagemeyer's key business) in North America were US$849 million.
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In the U.S., sales in PPS fell by 5.5%. Two government contracts were not renewed in the first half, accounting for more than 2 percentage points of the drop. U.S. construction and installation business was flat. A decrease in residential business was offset by commercial sales.
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U.S. ...
Finance
Thomas & Betts to Buy Lamson & Sessions for $450M
Thomas & Betts Corporation, Memphis, TN, has agreed to acquire Lamson & Sessions for $450 million in cash.
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Lamson & Sessions, with its Carlon brand and trademarked Blue Box, is a North American supplier of non-metallic electrical boxes, fittings, flexible conduit and industrial PVC pipe.
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For the calendar year 2008, Thomas & Betts's preliminary assessment is that the acquisition will contribute $500 million to revenues.
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In addition, the company is assessing strategic options regarding Lamson & Sessions' PVC pipe business, potentially resulting in a divestment of that unit.
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Thomas & Betts Corporation is a manufacturer of electrical components used in construction, industrial and utility markets. The company is also a ...

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