The 2020 Mid-Year Economic Update_long

July 2014 Distribution M&A Roundup: MSC Industrial, 3M, Airgas & Grainger

Slow but steady economic improvement raise expectations for more mergers and acquisitions for the rest of 2014.
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Distributor mergers and acquisitions picked up in July, with dozens of companies affected and more talk circulating about how M&A activity is increasing as the economy continues to recover.

2013 market trends showed sellers were reluctant to enter into M&A agreements. One year later, Airgas has completed only four acquisitions in the first half of 2014 (Abbot Gas Products, Hember LimitedTechnical Alloy & Industrial Gas, and Welding & Therapy Service). But executive chairman Peter McCausland is optimistic that more are on the books for the rest of the year.

Manufacturer 3M took full ownership of Sumitomo Electric Industries Ltd.’s 25 percent interest in Sumitomo 3M Ltd. for 90 billion Japanese yen (US$885 million). Upon completion of the transaction, 3M will own 100 percent of Sumitomo 3M Ltd. 3M’s sales were up 2.6 percent in the first quarter of 2014, and 4.9 percent in the second quarter.

The 2013 acquisition of Barnes Group Inc. by MSC Industrial Direct Co. Inc. drove MSC’s sales for its fiscal second quarter ended March 1, 2014, up 16.2 percent from the prior-year period to $661.5 million. The 2013 acquisition of Barnes Distribution North America contributed $69.8 million to sales in the fiscal second quarter.

Read more about how 2013’s M&A activity is affecting 2014’s distribution market.

Here are other key deals that occurred in July 2014:

Acklands-Grainger agreed to acquire WFS Enterprises Inc., a tools and supplies distributor with 2013 sales of C$90 million (US$87 million).

Sonepar Deutschland, a division of Paris, France-based electrical distributor Sonepar, acquired BTF-Group, which consists of three companies in Germany. BTF has annual sales of €50 million (US$68.2 million) and eight branches.

Belgian manufacturer Beaulieu International Group (B.I.G.) acquired a controlling interest in Opus Group of Companies, a Russian flooring distribution business.

FCX Performance Inc., a distributor of process flow control products and value-added services, acquired Pump Energy Inc., a distributor of pumps, seals and related aftermarket services with two Texas locations.

TriCan Tire Distributors, Edmonton, AB, a subsidiary of American Tire Distributors, agreed to acquire five companies in Alberta for $152.9 million.

Bridgestone Corp.'s wholly-owned U.S. subsidiary, Bridgestone Hose America Inc., agreed to acquire Masthead Industries LLC. Masthead currently operates hose sales and service stores in 34 locations in the U.S. and one in Mexico.

Catch up with more deals in distribution and manufacturing at our M&A news page.

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