The 2020 Mid-Year Economic Update_long

August M&A Roundup: Mammoth Deals Highlight Busy Month

M&A volume hasn’t completely returned to pre-COVID volume, but last month saw decent activity and some multibillion-dollar deals, including two in building materials & construction and one involving a distribution ERP provider.
August M&A Roundup

Even though volume hasn’t quite returned to pre-COVID-19 levels, distribution M&A notched another big month in August — at least relative to the first half of the pandemic — with a few monumental deals that sparked plenty of buzz across the industry.

On August 11, Atlanta-based HD Supply Holdings Inc. shifted gears and announced that it would sell its Construction & Industrial – White Cap business to an affiliate of private equity firm Clayton, Dubilier & Rice for $2.9 billion. HD Supply had originally planned to spin off the Construction & Industrial – White Cap business into a separate publicly traded company but decided PE was again the right path for the divestiture. Click here for more analysis on the deal.

Another big deal taking place in the same sector occurred about two weeks later when Builders FirstSource Inc. and BMC Stock Holdings Inc. said they had agreed to merge in an all-stock transaction valued at $2.5 billion. The deal unites the No. 2 (BLDR) and No. 5 (BMCH) companies on MDM’s 2020 Building & Construction Top Distributors list. Click here for more analysis on that deal.

And though not a distributor, Epicor — an ERP provider that many businesses in this space are familiar with through its Prophet 21 platform — agreed to be sold to CD&R (yes, the same firm that bought White Cap) for $4.7 billion.

Also during the month, a few companies announced multiple acquisitions, including Motion Industries, Bunzl PLC and National Safety Apparel.

August Deals

What’s in store for the remainder of the third quarter and then the final few months of 2020? More billion-dollar deals on the way? More moves by CD&R? Stay tuned to MDM for all the latest M&A activity and analysis on buyside and sellside trends. In the meantime, here is a roundup of all the deals from August listed in reverse chronological order.

  • CD&R to Acquire Epicor from KKR for $4.7 Billion — New York-based private equity firm Clayton, Dubilier & Rice announced it would acquire Epicor Software Corp. from investment firm KKR for $4.7 billion. Epicor is a major player in the distribution ERP space.
  • Builders FirstSource to Acquire BMC Stock Holdings for $2.5 Billion — Builders FirstSource Inc. (Nasdaq: BLDR), Dallas, Texas, and BMC Stock Holdings Inc. (NASDAQ: BMCH), Raleigh, North Carolina, on August 27 announced that they have entered into a definitive merger agreement under which Builders FirstSource and BMC will combine in an all-stock merger transaction valued at $2.5 billion. The deal unites the No. 2 (BLDR) and No. 5 (BMCH) companies on MDM’s 2020 Building & Construction Top Distributors
  • TricorBraun to Acquire Price Container and Packaging — Packaging products supplier TricorBraun, St. Louis, Missouri, announced that it has agreed to acquire Price Container and Packaging, a rigid packaging distributor serving primarily the industrial and food markets. Financial terms of the deal weren’t disclosed.
  • National Safety Apparel Acquires Two Safety Businesses — National Safety Apparel, Cleveland, Ohio, announced it had expanded its USA-based safety and military clothing brands with the acquisition of Chicago-based leather glove manufacturer Kunz Glove and Virginia Beach-based military gear manufacturer Wild Things.
  • Bunzl Acquires Two Companies, Including MCR Safety — Bunzl PLC announced that it has agreed to acquire two companies — MCR Safety, a Memphis, Tennessee-based safety distributor, and Abco Kovex, a Dublin, Ireland-based flexible packaging distributor. Financial terms of the deals weren’t disclosed.
  • Core & Main Completes Acquisition of Water Works Supply — Core & Main LP, St. Louis, Missouri, a distributor of water, sewer and fire protection products, said that it has closed on its previously announced agreement to acquire Water Works Supply Co., a New Jersey-based waterworks distributor. Financial terms of the deal weren’t disclosed.
  • Schaedler Yesco Acquires Two Locations from Rexel USA — Electrical distributor Schaedler Yesco Distribution Inc., Harrisburg, Pennsylvania, announced it has acquired the Pittston, Pennsylvania, and Johnson City, New York, locations owned and operated by Rexel USA. The acquisition includes the Rockwell Automation APR serving those locations. Financial terms of the deal weren’t disclosed.
  • Heritage Landscape Supply Acquires Silver Creek Supply — Heritage Landscape Supply Group Inc., McKinney, Texas, a wholly owned subsidiary of building materials distributor SRS Distribution Inc., announced it has added another asset to its portfolio with the acquisition of Boise, Idaho-based Silver Creek Supply. Financial terms of the deal weren’t disclosed.
  • Mallory Safety Acquires Wise Safety — Mallory Safety and Supply, Portland, Oregon, announced that it has acquired Wise Safety & Environmental, a St. Louis, Missouri-based distributor of safety supplies and abatement products and services. Financial terms of the deal weren’t disclosed.
  • H. Hanson Acquires Superior Tool — Naperville, Illinois-based hand tool manufacturer C.H. Hanson has acquired Cleveland, Ohio-based Superior Tool, a manufacturer of plumbing tools founded in the 1940s. Financial terms of the deal weren’t disclosed.
  • HD Supply Shifts Gears, Opts to Sell White Cap to CD&R for $2.9B — HD Supply Holdings Inc. (NASDAQ:HDS), Atlanta, announced that it has entered into a definitive agreement to sell its Construction & Industrial – White Cap business to an affiliate of private equity firm Clayton, Dubilier & Rice for $2.9 billion.
  • Motion Industries Acquires Two Companies — Motion Industries Inc., Birmingham, Alabama, a distributor of maintenance, repair, and operation (MRO) replacement parts and a wholly owned subsidiary of Genuine Parts Co., announced two acquisitions. Motion has entered into agreements to acquire TRC Hydraulics, a Canadian-based supplier of hydraulic products and services, and F&L Industrial Solutions, Inc., a distributor of T-slotted aluminum extrusion components. Both transactions closed with an effective date of August 1, 2020. Financial terms of the deals weren’t disclosed.
  • Heritage Landscape Acquires Stone Center of Indiana — Heritage Landscape Supply Group Inc. acquired Stone Center of Indiana Inc., an independent distributor of hardscapes, architectural stone and landscape products. Financial terms of the deal were not disclosed. (Note: This deal closed in July but not in time to be included in our July M&A Roundup.)

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