The 2020 Mid-Year Economic Update_long

July M&A Roundup: Volume Holds Steady for Second Month 

Though not where it should be in a typical July, distribution M&A activity reached double-digit transactions for a second straight month. Our M&A Roundup recaps deals from LINC Systems, Core & Main, SRS Distribution and more. 
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The wholesale distribution industry notched a second straight month of deals in the double digits after a spring of discontent due to the coronavirus stopping — or at least slowing — M&A activity across all verticals. 

Ten transactions were announced in July, representing a range of sectors and a mix of strategic and financial buyers. Though well short of the typical volume that the distribution space might see in a month, the total represents a slow climb back to normal as businesses learn to navigate amid the COVID-19 complexity. 

“In this current environment, conducting due diligence is harder, and assessing individuals and personalities is harder,” said Reed Anderson, managing director and head of Houlihan Lokey’s Specialty Distribution practice, in a recent MDM Premium article. “If you are a strategic buying a smaller player in your space, you can take comfort in generally knowing what that target has been doing, and you have personnel capabilities on your team to make sure that M&A transaction works well post-close. 

“But if you are a private-equity platform buyer meeting a team, or a business, for the first time through a sale process, getting comfortable with the business and with the team is a lot harder today because you are not spending the same amount of physical time with them. You are not sitting down, breaking bread, touring facilities or having natural sidebar conversations as much. That adds a layer of complexity and risk.” 

July Deals

What’s in store for the rest of the summer? Will that added layer of complexity and risk remain intact along with the lingering COVID-19 crisis? 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 July listed in reverse chronological order. 

  • LINC Systems Acquires Active Sales Co.— Private equity firm Center Rock Capital Partners LP announced that LINC Systems, its industrial fastener and packaging distribution platform, has acquired Active Sales Co., Santa Fe Springs, California. Financial terms of the deal weren’t disclosed. 
  • Brady Acquires Campbell Paper— Brady, Las Vegas, a distributor of janitorial supply, equipment and foodservice, announced the acquisition of Campbell Paper in Fort Worth, Texas. Financial terms of the deal weren’t disclosed. 
  • Cook & Boardman Acquires Two Companies— Cook & Boardman, Winston-Salem, North Carolina, acquired Advantech, Dover, Delaware, and Building Specialties, Birmingham, Alabama. Financial terms of the deal weren’t disclosed. 
  • B2B Industrial Packaging Acquires All Packaging— B2B Industrial Packaging, Addison, Illinois, announced the acquisition of All Packaging Co. Inc., a Kansas City, Missouri-based industrial packaging supply distributor. Financial terms of the deal weren’t disclosed. 
  • Core & Main to Acquire Water Works Supply— Core & Main LP, a St. Louis-based distributor of water, sewer and fire protection products, announced that it has agreed to acquire Water Works Supply Co. — Core & Main’s 11th transaction since becoming an independent company in August 2017. Financial terms were not disclosed. 
  • American Producers Supply Acquires Northwest Tool Supply— American Producers Supply Co., a Marietta, Ohio-based supplier of industrial, construction and oilfield supplies in the Midwest, announced the acquisition of Northwest Tool Supply, a Wixom, Michigan-based construction supplier. Financial terms of the deal weren’t disclosed. 
  • Report: MattscoSupply Acquires Tool Center — Pipes, valves and fittings company Mattsco Supply Co., Tulsa, Oklahoma, has acquired Tool Center Inc., also based in Tulsa, according to a report in the Tulsa World newspaper. Financial terms of the deal weren’t disclosed. 
  • SRS Distribution Acquires A.L.L. Roofing Materials— SRS Distribution Inc., McKinney, Texas, has acquired A.L.L. Roofing Materials, a San Jose, California-based distributor of residential and commercial roofing products & accessories. Financial terms of the agreement were not disclosed. 
  • Meridian Adhesives Group Acquires E-Chem— Meridian Adhesives Group, Dalton, Georgia, announced the acquisition of E-Chem, Albuquerque, New Mexico. Financial terms of the deal weren’t disclosed. 
  • ABB Completes Divestment of Power Grids to Hitachi— ABB, Zurich, Switzerland, announced the completion of the divestment of 80.1 percent of its Power Grids business to Hitachi. The deal was valued at $7.6 billion to $7.8 billion. 

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