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Finance
Valley National Gases Acquires Mitchell Industrial
Valley National Gases Inc., Washington, PA, has acquired Mitchell Industrial Supply Inc, an industrial gases and welding supply distributor in Elkhart, IN. Mitchell serves customers throughout Northern Indiana and Southwest Michigan.
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Valley National Gases is a packager and distributor of industrial, medical and specialty gases, welding equipment and supplies, propane and fire protection equipment. Valley National Gases operates 75 locations in 14 states, with eight production and distribution centers in the eastern ...
Finance
RBC Bearings Acquires Coastal Bearing Services
RBC Bearings Inc., Oxford, CT, an international manufacturer of precision plain, roller and ball bearings, has acquired CBS/Coastal Bearing Services, Houston, TX, for $3.7 million in cash.
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CBS manufactures, inspects and refurbishes large bearings for the oil and mining industries, as well as other general industrial applications with sizes ranging up to 124 inches in diameter. CBS has sales of $3.1 million for the year ended Dec. 31, 2006.


RBC said that CBS represents another step in our strategy to expand our presence in the large bearing segment."

RBC operates 17 manufacturing facilities in four ...
Finance
Wolseley Appoints VP of Acquisitions for NA
UK-based Wolseley plc has appointed Dan Parr to vice president of Acquisitions and Business Integration for Wolseley's North American Division, comprised of Ferguson, Stock Building Supply and Wolseley Canada.
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He will oversee acquisitions, and coordinate business integration and installation into Wolseley's systems and processes.

Parr began his career with Ferguson in 1988 as an Internal Auditor. He was promoted two years later to internal audit manager and transferred to Atlanta, Ga., in 1993 to become the integration manager for our Hub, Inc. acquisition. Parr returned to headquarters in 1995 as manager of Acquisitions and Installations, and was promoted to director in 2003 and to vice president in ...
Top Distributor Sectors
Europe Offsets Fall in Saint-Gobain U.S. Sales
Saint-Gobain overall sales were up 6% in the first half of 2007 to US$29.8 billion (21.7 billion euros).
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All the group's sectors saw a rise in sales, with organic growth overall at 6.9%.
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Construction markets in Europe, bolstered by the impact of regulations promoting energy efficiency, offset the downturn in the U.S. housing market. Sales were strong in Asia and emerging countries (organic growth of 19%).
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Construction Products posted a 4.1% organic growth rate. About three-fourths of sales in this sector come from Europe and emerging countries. Only a quarter is in the U.S.
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The Building Distribution sector posted a 13.3% rise in sales, buoyed by acquisitions, and organic growth of 8.7%. Strong sales were seen in France, ...
Top Distributor Sectors
Huttig Building Products Sales Down 20% YTD
Huttig Building Products, Inc., distributor of millwork, building materials and wood products, reported sales in the second quarter were $239.6 million, down 19% from the prior-year period.
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Sales to national accounts, or 35% of sales in the second quarter, declined by only 17%.
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Jon P. Vrabely, president and CEO, said: This quarter represents the first profitable quarter for Huttig since a year ago, just before the significant downturn in the housing market."


Sales for the first six months of 2007 were $461.9 million, a 20% decrease over the prior-year period. This decrease is primarily attributable to the 27% drop in housing ...
Top Distributor Sectors
Kennametal Sales Up 6% in 2007
Kennametal Inc., Latrobe, PA, reported sales in fiscal 2007 were $2.4 billion, up 6% on an organic basis. The growth was partially offset by the net impact of acquisitions and divestitures of 7%.
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In 2007, Kennametal expanded its advanced materials segments with the acquisitions of the Sintec Group and the Camco Group, as well as Purity Metal Holdings Inc. Kennametal also added to its metalworking segments with Federal Signal Corporation's cutting tool business, and completing the purchase of the company's Spanish affiliate, Kenci S.A.
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Sales in the fourth quarter were $657 million, up 6% on an organic basis. In the fourth quarter, Metalworking Solutions & Services Group sales were higher by 15% overall, with 5% organic growth. Europe sales were up 9%; Asia ...
Top Distributor Sectors
Praxair Sales Grow 12% in 2Q
Praxair, Inc., Danbury, CT, reported sales in the second quarter 2007 increased to $2.3 billion, 12% above the same period a year ago. Sales growth was led by significant new business coming on-stream in the energy sector and new business in Asia and South America.
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Profit was up 18% to $291 million.
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In North America, second-quarter sales reached $1.3 billion, 12% above the prior-year quarter. Sales growth came primarily from higher sales to energy and general manufacturing markets, followed by electronics, healthcare and food and beverage.
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In Europe, sales in the quarter of $336 million grew 14%, and increased 6% excluding currency effects, as compared to the prior year. Underlying sales growth was broad-based across Europe and most major end ...
Free
Rockwell Automation Sales Grow 9% in 3Q
Rockwell Automation, Inc., Milwaukee, WI, reported sales in the third quarter 2007 were $1.28 billion, up 9% from the same period in 2006. Profit was $164.2 million, compared with profit of $149 million last year.
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International sales increased 13%, excluding the effect of currency translation, with continued strength in Europe and Latin America, and improved performance in Asia Pacific and Canada. From an end-market perspective, sales growth in consumer industries outpaced the growth in resource-based industries.
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Rockwell expects a gradually expanding global industrial economy across most end markets through the remainder of the year in into fiscal 2008.
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The Control Products & Solutions segment sales were $698.1 million, an increase of 8%. ...
Top Distributor Sectors
Report: Rockford Products to File for Bankruptcy
The Rockford Register Star has reported that Rockford Products, Rockford, IL, a manufacturer of cold-formed components, fasteners and other related products, will file for Ch 11 bankruptcy protection to keep it running until a buyer is found.
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A Ch. 11 bankruptcy allows the supplier to restructure its debt. In 1987 employees bought Rockford, which was then near-bankrupt, from Rexnord Inc., according to the paper. The company had $101 million in sales in 2006 and has been buried under debt" since the buyout.
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Rockford's president told the Register Star that growing pension liabilities and the loss of key customers due to the slow automotive and housing markets sparked the decision to file ...
Sales & Marketing
Why Sales Compensation Plans Fail

With the recent attention in this industry given to strategic pricing, distributors who change their pricing structures must consider developing new sales compensation plans that reward improved profits. Before attempting a change, consider all appropriate structures and take steps to avoid implementation pitfalls.

According to a recent study, U.S. companies are markedly more satisfied with their sales compensation programs today than they were two years ago." Having spent the last 10 years designing and implementing sales compensation programs for hundreds of firms, I found this intriguing.

Upon further reading, I discovered that "markedly more satisfied" meant that 59 percent of companies surveyed in 2006 were satisfied compared to 34 percent in 2004. In other ...

Subscriber Only
Inflation by Commodity Group – Second Quarter 2007

These 16 select product groups provide a snapshot of inflation trends in industrial and construction channels. Second quarter 2006 is compared with second quarter 2007, and the first quarter 2006 with the second quarter 2007.

Metals & Metal Products
Plumbing Fixtures & Fittings
Fasteners
Hardware
Hand & Edge Tools

Chemicals & Allied Products
Adhesives & Sealants
Industrial Gases

Machinery & Equipment
Mechanical Power Transmission Equipment
Pumps, Compressors & Equipment
Electrical Machinery & Equipment
Ball and Roller Bearings
Metal Valves, Except Fluid Power
Industrial Material Handling Equipment
Fluid Power Equipment<br ...
Economic Trends
Monthly Wholesale Trade: May 2007

May 2007 sales of merchant wholesalers, except manufacturers'sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $357.2 billion, up 1.3 percent from the revised April level and were up 8.7 percent from the May 2006 level. The April preliminary estimate was revised upward $0.8 billion or 0.2 percent. May sales of durable goods were down 0.5 percent from last month, but were up 4.2 percent from a year ago. Compared to last month, sales of motor vehicle and motor vehicle parts and supplies were down 5.3 percent. May sales of nondurable goods were up 2.9 percent from last month and were up 13.1 percent from last year.


Inventories. Total inventories of merchant wholesalers, except ...

Free
MDM News Digest 3714

Two major distributors of industrial and oilfield PVF supplies, McJunkin Corporation, with nearly $2 billion in annual revenues,&nbsp ; and Red Man Pipe and Supply Company, nearly $1 billion in annual sales, have announced a merger of equals." Charleston, WV, and Tulsa, OK , will serve as co-headquarters for the new company. McJunkin Corporation CEO and President H.B. Wehrle III and Red Man Pipe and Supply Company President and CEO Craig Ketchum will serve as Co-CEOs for the new company.&nbsp ; More ...


Wolseley plc has reported it will close 24 more Stock Building Supply branches, primarily in the Midwest. The closures include a 370 headcount reduction. The announcement comes after ...
Subscriber Only
Distribution Financial Metrics and Trading Multiples
This table highlights key financial metrics and trading multiples for 30 publicly traded distributors in the industrial and building products industries. Download this data below. Also find graphic illustrating median EBIDTA multiples for the same distribution companies.


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<These materials,&nbsp ; prepared by Robert W. Baird & Co. for MDM,&nbsp ; are for informational purposes ...
Subscriber Only
MDM July 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 ...
Top Distributor Sectors
Airgas Sales Rise 18% in 1Q
Airgas, Inc., Radnor, PA, U.S. distributor of industrial, medical, and specialty gases, welding, safety, and related products, reported sales increased 18% in its first quarter ended June 30, 2007. Sales were $915 million. Profit was up 34%.
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Acquisitions accounted for 11% of the first-quarter sales growth. Same-store sales increased 7%, with hardgoods up 6% and rent up 8%.
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We had an outstanding quarter. We continue to see good growth in non-residential construction and energy markets, and our strategic products are also performing well," said Airgas CEO Peter ...
Plumbing Products & PVF Distribution
Watsco Sales Down 6% in First Half
HVAC distributor Watsco, Inc., Coconut Grove, FL, reported sales decreased 7% to $471 million for the second quarter ended June 30, 2007.
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Revenues in the first six months declined 6% to $842 million. Profit for the first six months was $35.4 million, down from the $41.8 million recorded in the same period a year ago. New branches added $21 million of revenue during the first half of 2007.
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The Watsco network has expanded by 23 locations over the past 12 months, with a working capital investment related to these network expansion activities of $18 million as of June 30, 2007.
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Watsco recently announced it would acquire ACR Group Inc. , which had $240 million in sales in 2006. It has 54 locations in 10 ...
Finance
Simpson Strong-Tie Buys Swan Secure Products
Simpson Strong-Tie Company Inc. has purchased Swan Secure Products Inc., Baltimore, MD, a manufacturer of stainless steel and other fasteners, for $43.5 million in cash. Swan Secure has locations throughout the U.S.


Simpson offers a line of wood-to-wood, wood-to-concrete, and wood-to-masonry connectors and fastening systems, and pre-fabricated shearwalls. Simpson also sells adhesives, mechanical anchors and powder actuated tools for concrete, masonry and ...
Finance
Platinum Equity to Buy Ryerson for $2B
Platinum Equity has agreed to acquire Ryerson Inc., Chicago, IL, for $2 billion, which includes the assumption of debt. The price represents a 15% premium over Ryerson's closing share price on Feb. 31, 2007, the day Ryerson announced it was considering strategic alternatives.

Ryerson is a distributor and processor of metals in North America, with 2006 revenues of $5.9 billion.
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With the transaction, Ryerson will go from a public to a private company.
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The merger agreement allows Ryerson to solicit additional proposals from other potential acquirers through Aug. 18, 2007.
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When Ryerson announced it was considering strategic alternatives for the company, 50 potential acquirers were identified and contacted, including foreign and domestic ...
Finance
Sumitomo Electric Carbide Buys Master Tool
Sumitomo Electric Carbide Inc., Mount Prospect, IL, has acquired cutting tool manufacturer Master Tool, Grand River, OH.
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Master Tool specializes in the development of custom tooling to machine critical features on engine blocks, cylinder heads, connecting rods, crank shafts, transmission cases and other automotives parts.
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Sumitomo manufactures metal cutting tool ...

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