November M&A Roundup: Consolidation Escalates Amid COVID-19 Surge

Not only has activity rebounded despite the rise in coronavirus cases and corresponding lockdowns, but also multibillion-dollar deals are happening more frequently. Here’s our M&A recap from a very busy month.
TricorBraun to Acquire Packaging Company PBFY

The onset of the COVID-19 pandemic last spring all but stopped M&A in wholesale distribution, but companies aren’t letting the latest surge in cases and corresponding state lockdowns prevent them from seeing their deals reach the finish line.

November, with 18 deals reported, wound up being the busiest month for activity since the coronavirus began disrupting the industry in March and April. Last month brought a nice mix of sectors (though building materials clearly led the way) and a good balance of financial and strategic deals.

The impact of deals matched the volume. November saw a huge shakeup in the building materials sector with a few multibillion-dollar deals such as Home Depot re-acquiring HD Supply Holdings Inc. for $8.7 billion and Foundation Building Materials Inc. being acquired by a private equity firm for $1.4 billion. PrimeSource and US LBM Holdings also traded hands for undisclosed prices.

In fact, the rise of “mega-deals” was one of the trends that Bloomberg Law identified in its recent look at the M&A landscape. Granted, its analysis wasn’t limited to distribution, but it speaks to a trend that we’ve seen in this vertical as activity resumed.

“By aggregate deal volume and average deal size for all months this year combined, 2020 is rapidly catching up to 2019, and is finishing much more solidly than perhaps would have been expected just a few months ago,” the company wrote in the Nov. 16 post. “Despite seeing very low average deal volumes in January, April, May and June, the overall average deal size for the year so far ($78.6 million as of Nov. 13) has just overtaken that of the same period in 2019 ($76.6 million). Mega-deals have helped to boost the market, again. As of Nov. 13, 33 global mega-deals with an aggregate deal value of $634.8 billion announced in 2020 are currently pending or completed, beating the deal count for the same period last year by three deals.”

November Deals

It wasn’t just mega-deals that got done in November. Consolidation happened among small businesses and within the middle market, and normally acquisitive companies such as Ferguson and Bunzl each added to their respective portfolios.

In case you missed anything, here are all the M&A announcements — primarily distributors but also manufacturers that sell through the channel — MDM covered during the previous month (click the hyperlinked headline for more details):

  • BMC to Acquire Maryland-Based Building Materials Distributor — BMC Stock Holdings Inc., Raleigh, North Carolina, announced that it has agreed to acquire TW Perry, a Gaithersburg, Maryland-based building materials distributor that serves the Northern Virginia, Maryland and Washington, D.C., markets.
  • PPG to Acquire Coatings Manufacturer Ennis-Flint — Paints, coatings and specialty materials supplier PPG, Pittsburgh, announced that it has agreed to acquire Ennis-Flint, a Greensboro, North Carolina-based manufacturer of coatings, for $1.2 billion.
  • The Bossard Group Invests in Welding Business — Swiss fastener distributor The Bossard Group has invested a 40% stake in the startup company MultiMaterial-Welding AG, Stansstad, Switzerland. The company said the move is part of its “long-term strategy is investing in innovative and forward-looking technologies. This latest investment brings the Bossard Group closer to its vision of being the world’s leading reference for fastening solutions.”
  • Emerson Completes Acquisition of 7AC Technologies — Emerson, St. Louis, announced it has completed the purchase of 7AC Technologies, Inc., a Beverly, Massachusetts-based technology startup whose air conditioning technology enables energy savings and sustainable air management. Financial terms of the deal weren’t disclosed.
  • Protective Industrial Products Adds Bolt-On PPE Supplier — Protective Industrial Products Inc., Latham, New York — a supplier of hand protection and PPE to the industrial, construction and retail markets — announced the acquisition of Primax Manufacturing & Trading Inc. Financial terms of the deal weren’t disclosed. PIP is a portfolio company of Audax Private Equity.
  • Ferguson Acquires Two Companies — Ferguson PLC announced the addition of two companies to its portfolio. The plumbing and HVAC distribution giant acquired Old Dominion Supply Inc., a wholesale distributor of HVAC parts and supplies in Maryland and Northern Virginia, and Atlantic Construction Fabrics Inc., a geotextile company operating along the East Coast. Financial terms of the two deals weren’t disclosed.
  • PrimeSource Being Sold from One PE Firm to Another — Specialty building materials distributor PrimeSource, Irving, Texas, is being sold from one private equity firm to another. Its previous owner, Platinum Equity, announced that it has agreed to sell PrimeSource — its official corporate moniker is PriSo Holding Corp. — to Clearlake Capital Group L.P. Financial terms of the deal were not disclosed.
  • Foundation Building Materials to Be Acquired for $1.4 Billion — Specialty building products distributor Foundation Building Materials Inc., Santa Ana, California, has agreed to be acquired by an affiliate of the private equity firm American Securities LLC for $19.25 per share, or $1.4 billion, including outstanding debt. An affiliate of Lone Star Funds, another private equity firm, acquired FBM in 2015 and has maintained majority ownership since the company’s initial public offering in 2017. FBM will become a privately held company.
  • Home Depot to Acquire HD Supply Holdings for $8.7 Billion — HD Supply Holdings Inc., Atlanta, announced that it is being acquired by home improvement retailer The Home Depot Inc. for $56 per share, or $8.7 billion. Home Depot sold HD Supply to private equity in 2007, and HDS went public in 2013.
  • Builders FirstSource, BMC Stock Holdings Clear Key Hurdle — Builders FirstSource Inc. and BMC Stock Holdings Inc. announced the early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, effective on Nov. 13. The companies in August announced their intention to merge.
  • US LBM to Be Acquired by Bain Capital Private Equity — Building materials distributor US LBM, Buffalo Grove, Illinois, announced it has agreed to be acquired by Bain Capital Private Equity, which will own a majority stake in the company. US LBM will continue to operate under the leadership of President and CEO L.T. Gibson and the current management team. Financial terms of the deal were not disclosed.
  • Myers Industries Acquires Elkhard Plastics — Myers Industries Inc., Akron, Ohio, a manufacturer of polymer products and a distributor for the tire, wheel and under-vehicle service industry, announced the acquisition of Elkhart Plastics Inc., a rotational molding company. Financial terms of the deal weren’t disclosed.
  • Jon-Don Acquires Factory Cleaning Equipment — JanSan distributor Jon-Don, Roselle, Illinois, has acquired Factory Cleaning Equipment Inc., Aurora, Illinois. Financial terms of the deal weren’t disclosed. Jon-Don said the acquisition of FCE “marks a new phase of strategic growth for Jon-Don, as the company continues to expand its offerings within the JanSan, restoration equipment, and concrete surface prep and polishing industries.”
  • Bunzl Agrees to Acquire Brazilian Safety Business — Bunzl PLC announced that it has agreed to acquire SP Equipamentos, a personal protection equipment distributor based in Sao Paulo, Brazil. Financial terms of the deal weren’t disclosed.
  • EGW Acquires Buy Wholesale Company — Waterworks and plumbing products distributor EGW Utilities Inc., Carrollton, Texas, announced it has acquired Buy Wholesale Company LLC, Montgomery, Texas. Financial terms of the deal weren’t disclosed.
  • Builders FirstSource Acquires Kansas City Building Supply — Builders FirstSource Inc., Dallas, announced it has acquired Kansas City Building Supply, located in Overland Park, Kansas. Financial terms of the deal weren’t disclosed.
  • Atlas Copco to Acquire European Distributor Ehrler and Beck — Stockholm, Sweden-based manufacturer Atlas Copco agreed to acquire Ehrler and Beck GmbH, a distributor of vacuum equipment and vacuum services. Financial terms of the deal weren’t disclosed.
  • US LBM Acquires Zeeland Lumber & Supply — US LBM Holdings, a Buffalo Grove, Illinois-based distributor of specialty building materials, has acquired Zeeland Lumber & Supply, a building products dealer and manufacturer with six locations in Michigan and Northern Indiana. Financial terms of the deal weren’t disclosed.

Did we miss anything? Please send M&A announcements to editor@mdm.com. We also welcome suggestions for “Behind the Deal,” our occasional series that takes a deep dive into market-shifting moves in wholesale distribution.

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