The 2020 Mid-Year Economic Update_long

June M&A Roundup: Deals Resume After COVID-Related Drought 

Mergers and acquisitions among distributors and manufacturers picked up last month after an especially slow April and May, due to concerns over the coronavirus. 
M&A

M&A activity across distribution and manufacturing was understandably slow during MarchApril 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 Juneat 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 

Plenty of distributors added to their portfolios during the month, including Dakota Supply GroupMars SupplyDGI Supply and Atlas Copco. 

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. 

Activity Outlook 

“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 Andersonmanaging 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. 

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