MDM Staff, Author at Modern Distribution Management

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 ...

August 22, 2007

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. ...

August 21, 2007

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 ...

August 20, 2007

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, ...

August 20, 2007

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 ; ...

August 20, 2007

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, ...

August 19, 2007

Top Distributor Sectors

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. ...

August 17, 2007

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 ...

August 16, 2007

Top Distributor Sectors

PT/MC Sales Up 2.2% in June

Following last month's jump in sales, U.S. distributors'sales of PT/MC products continue to increase with a 2.2 percent growth from May to June, according to the Power Transmission Distributors Association June 2007 month-end trend report. Year-to-year comparisons remain positive with sales in June 2007 coming in 4.7 percent higher than in June 2006. Accounts receivable collection days continue to decline, dropping 1.4 percent when compared to May. The June 2007confidence index for U.S. distributors remained unchanged for the fourth month in a row at 6.6 (on a 10-point scale).
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Canadian distributors'sales in PT/MC products fell 2.1 percent from May to June after a rise in last month's sales. Year-to-year comparisons were relatively stable with a 0.3 percent increase over ...

August 16, 2007

Economic Trends

MAPI Forecast: Inflation-Adjusted GDP Growth Will Slow

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 predicts 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 most recent forecast represents a pullback from the May 2007 report, when MAPI envisioned GDP to grow by 2.3 percent in 2007 and by 3.0 percent in 2008. By supplying major assumptions for the economy and running simulations through the Global Insight Macroeconomic Model, the Alliance generates unique macroeconomic and industry forecasts.

...

August 16, 2007

Economic Trends

June Machine Tool Consumption up 5.1%

June U.S. manufacturing technology consumption totaled $347.70 million, according to The Association For Manufacturing Technology and the American Machine Tool Distributors' Association. This total, as reported by companies participating in the USMTC program, was up 5.1% from May, and up 0.4% from the total of $346.47 million reported for June 2006. With a year-to-date total of $1,982.52 million, 2007 was up 7.7% compared with 2006.
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These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTC program.
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Through the first half of this year, manufacturers have continued to increase purchases of advanced production equipment," said John B. Byrd III, AMT President. "These strategic investments ...

August 16, 2007

Economic Trends

Housing Starts Down 6.1% in July

According to the U.S. Census Bureau and the Department of Housing and Urban Development, privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,381,000. This is 6.1 percent below the revised June estimate of 1,470,000 and is 20.9 percent below the revised July 2006 rate of 1,746,000.
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Single-family housing starts in July were at a rate of 1,070,000; this is 7.3 percent below the June figure of 1,154,000. The July rate for units in buildings with five units or more was 275,000.

Building Permits
Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,373,000. This is 2.8 percent below the revised June rate of 1,413,000 and is 22.6 percent (& plusmn; 1.3%) below the ...

August 16, 2007

Finance

LN Acquisition Corp. Acquires Reelcraft

LN Acquisition Corp., St. Louis, MO, a Harbour Group company, has acquired Reelcraft Industries, Inc., Columbia City, IN.
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Reelcraft Industries, Inc., is a manufacturer of spring-driven hose, cord, and cable reels for use in industrial, automotive, aerospace, military and specialty applications.
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Reelcraft has facilities in the U.S., Canada, England and China. President Walt Sterneman will continue to lead the business after the transaction.
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Reelcraft will join Lincoln Industrial and Alemite within LN Acquisition.
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Bart Aitken, CEO of LN Acquisition, said: We don't expect the marketplace to see significant changes; Lincoln, Alemite and Reelcraft will continue to market their products through their respective sales channels and ...

August 16, 2007

Economic Trends

Industrial Production Up 0.3% in July

Industrial production rose 0.3 percent in July after an increase of 0.6 percent in June. At 113.9 percent of its 2002 average, total industrial production in July was 1.4 percent above its year-earlier level. In July, manufacturing output moved up 0.6 percent and mining output advanced 0.7 percent, but the output of utilities fell 2.1 percent.

Capacity utilization for total industry edged up to 81.9 percent, a rate 0.5 percentage point below the level in July 2006 but 0.9 percentage point above its 1972-2006 average.

Full industrial production/capacity utilization details <a href=/databank/ipcu0707.pdf" ...

August 15, 2007

Finance

Hagemeyer Acquires Bryant Electric Supply

Hagemeyer North America has acquired Bryant Electric Supply Company, Inc., Charlotte, NC, to extend its goal of expanding its electrical market penetration in the Southeastern U.S.
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Bryant has annual revenues of $50 million and operates five locations with 100 associates. It is focused in the industrial segment and also serves the Construction and Installation market, mainly non-residential. Bryant will be merged with Hagemeyer's Carolinas business unit. Bryant Electric Supply will continue to operate under the same name.

We're excited to be teaming up with Bryant to further penetrate the growing Charlotte market," said Dave Gabriel, CEO of Hagemeyer North America. "This further strengthens Hagemeyer's commitment to growing our electrical business, building ...

August 14, 2007

Top Distributor Sectors

Home Depot Profit Falls in 2Q

The Home Depot reported fiscal 2007 second quarter consolidated net earnings of $1.6 billion compared with $1.9 billion in the same period in fiscal 2006.
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Sales for the second quarter totaled $22.2 billion, a 1.8% decrease from the second quarter of fiscal 2006, reflecting negative comparable store sales of 5.2%, offset in part by sales from new stores.

In a conference call, Home Depot reported sales for HD Supply were down 7% overall, with organic sales down 10%.
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While the challenging housing market continues to present us with a tough selling environment, our financial performance was in line with our expectations," said CEO Frank Blake.

"... We believe the housing and home improvement markets will remain soft into 2008; we will ...

August 14, 2007

Subscriber Only

Wholesale Prices Up 0.6% in July

Wholesale prices advanced 0.6% in July, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported. This increase followed a 0.2% decline in June and a 0.9% rise in May.

At the earlier stages of processing, prices received by manufacturers of intermediate goods rose 0.6% in July compared with a 0.5% gain in June, and the index for crude materials climbed 1.2% subsequent to a 0.3% increase a month earlier.
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Among prices for finished goods, the index for energy goods rose 2.5% in July following a 1.1% decrease in June. Prices for finished consumer foods inched down 0.1% after declining 0.8% in the previous month. By contrast, slightly counteracting the upturn in finished goods prices, the increase in the index for finished ...

August 14, 2007

Top Distributor Sectors

Timken Reorganizes Into Two Business Groups

The Timken Company, Canton, OH, will realign the company around two major business groups, the Steel Group and the Bearings and Power Transmission Group. The latter is composed of four divisions -Mobile Industries, Process Industries, Aerospace & Defense and Distribution & Services.
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The company has named Michael C. Arnold as executive vice president and president, Bearings and Power Transmission Group. Salvatore J. Miraglia, Jr., will continue as president of the Steel Group.
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Before, Timken had three groups: Steel, Industrial and Automotive.
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The organizational changes are focused primarily on improving Timken's operating effectiveness and are also anticipated to streamline operations and eliminate redundancies. When fully implemented, the ...

August 13, 2007

Top Distributor Sectors

SYSCO Sales Up 7.4% in Fiscal 2007

SYSCO Corporation, Houston, TX, reported sales increased 8.5% to $9.23 billion in the fourth quarter ended June 30, 2007. Sales for fiscal 2007 increased 7.4% to $35.04 billion.
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Profit was $303.4 million in the fourth quarter, compared with $254.1 million in the prior-year period. In fiscal 2007, profit was $1 billion, compared with $855.3 million in the prior fiscal year, an increase of 17%.

More details <a href=http://phx.corporate-ir.net/phoenix.zhtml?c=86717 & p=irol-newsArticle & ID=1039553 & highlight=" ...

August 13, 2007

Top Distributor Sectors

Praxair Sells Interest in Israeli Company

Industrial gases company Praxair, Inc., Danbury, CT, has agreed to sell its majority interest in Maxima Air Separation Center Ltd., Ramat Gan, Israel, to Discount Investment Corporation Ltd., one of Israel's largest holding companies, a part of the IDB Group.
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DIC already holds an interest in Maxima.
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Maxima has two air separation plants and had sales of $23 million in 2006. Following the sale, Maxima will continue to serve as a distributor of Praxair's products in Israel and will continue to have access to certain Praxair technology. Under the agreement, Maxima will be defined as a Praxair technology associate.
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Praxair had 2006 sales of $8.3 billion. The company produces, sells and distributes atmospheric, process and specialty gases, and ...

August 13, 2007

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