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Why General Tool & Supply Sold to Motion Industries

May 12, 2009

Last week, Motion Industries, Birmingham, AL, a $3.5 billion subsidiary of Genuine Parts Company, announced it had acquired General Tool and Supply, a regional industrial supplies distributor based in Portland, OR. Motion has also acquired General Tool's subsidiary Industrial Tool and Supply, Tucson, AZ.
The company's president, Bill Derville, told MDM shortly after the announcement that though selling to Motion was part of an eventual exit strategy for himself and other key stakeholders, it would also bring other benefits to the long-time family-held distributor.
One benefit: growth opportunities.
Derville says that the move will help take the company to the next level with the backing of a financially sound strategic acquirer. General Tool has had to pass on opportunities in the past because it didn't feel lt had the capital to take full advantage.
The distributor also wants to be able to serve customers on a much larger scale than they can now.
A similar sentiment was shared last fall by another Motion Industries acquisition, Drago Supply, Port Arthur, TX.  After the industrial supplies distributor was bought last September, Executive Vice President Sam Drago told MDM: Business is more complicated today than at any other time in our history, and there is a trend towards contracts with a larger geographic scale than we could offer." Such a business model does not favor a smaller distributor, Drago said, and partnering with Motion would enable Drago to continue growing in that direction.
Read more from the leaders at General Tool & Supply in the latest issue of MDM.
Behind the Motion Industries-General Tool Deal

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