M&A activity across distribution and manufacturing was understandably slow during March, April and May as the coronavirus stymied deals in all stages — those getting underway and even those well into the due diligence process.
But the severe spring drought gave way to a flurry of transactions in June, at least in comparison to the previous few months. In addition to the largest acquisition in recent memory finally closing — WESCO’s $4.5 billion purchase of Anixter — the month saw a handful of deals reach the finish line.
June saw some larger operators refocus on their core business operations by shedding assets. W.W. Grainger Inc. announced the divestment of two overseas businesses — its China operation and France-based Fabory Group — while Genuine Parts Co. sold S.P Richards Co. to two buyers in separate transactions.
At least one deal was publicly scrapped because of the coronavirus. Carlisle Cos. Inc. terminated its previously announced agreement to acquire Draka Fileca SAS due to the transaction’s regulatory approval not being received before the expiration of the parties’ agreed time to satisfy closing conditions.
Look for more on the evolving M&A landscape in the July 10 issue of MDM Premium, and look for more deals to get announced in the third and fourth quarters.
“M&A is down relative to where it has been — and the market had been on fire for many years — but M&A is not dead,” says Reed Anderson, managing director and head of Houlihan Lokey’s Specialty Distribution practice. “A good number of pre-COVID deals are kicking around that may now get done, and we are starting to see new deals roll out. The pace is the question. We still do not know when the public health crisis and the economy are going to get better. Yes, there is distress, but a ton of opportunity exists here too.”
In the meantime, here is a roundup of all the deals from June listed in reverse chronological order.
- Genuine Parts Co. Sells S.P. Richards Co. — Genuine Parts sold its S.P. Richards’ core U.S. operations to an investor group and S.P. Richards’ Supply Source Enterprises business operations to an affiliate of H.I.G. Capital.
- ZSi-Foster Completes Acquisition of Hydra-Zorb — ZSi-Foster, an Ideal Tridon company, adds pipe, hose and tube clamping strength with addition.
- DSG to Acquire Honold & La Page — Electrical, plumbing and HVACR distributor to purchase Wisconsin-based company in an asset sale.
- Grainger to Divest Grainger China — Company says divestment will help it remained focused on profitable growth in key geographies.
- WESCO Completes Merger with Anixter International — Electrical giants clear regulatory hurdles as Anixter becomes a wholly owned subsidiary of WESCO.
- Carlisle Companies Terminates Acquisition of Draka Fileca — COVID-19 stymies regulatory approval, preventing the deal from reaching the finish line.
- Owens & Minor Completes Sale of Movianto — Company to use proceeds of $133 million for further debt reduction.
- Atlas Copco Acquires Ovity Air Comprimé — French distributor of industrial air compressors will become part of Atlas Copco’s Compressor Technique business area.
- Grainger to Divest Fabory — Distribution giant selling European subsidiary to Dutch private equity firm Torqx Capital Partners for an undisclosed amount.
- Mars Supply Acquires Machine Tool Supply — Machine Tool Supply is a distributor of cutting tools, abrasives, mold components, workholding products, MRO and safety supplies.
- DGI Supply to Acquire Production Tool & Supply of Rockford — DGI Supply has hired the Production Tool & Supply employees and will continue to operate under the PT&S brand for its customers in the Rockford area.