MRO distributor Lawson Products Inc. (Nasdaq: LAWS), Chicago, on Tuesday announced the acquisition of Partsmaster, a Greenville, Texas-based MRO solutions provider, for $35.3 million.
Partsmaster, which was established in 1968, has annual sales of about $63 million and serves 16,000 customers with more than 200 sales representatives principally through its Greenville distribution center. Partsmaster had been a division of privately owned NCH Corp., an Irving, Texas-based industrial and commercial maintenance company.
“This transaction is an important step in our continued growth strategy. We’re very excited about expanding our sales team and customer base further positioning Lawson as a leader in MRO vendor managed inventory services,” said Michael DeCata, president and CEO of Lawson. “Partsmaster is a strong strategic fit with a similar VMI business model, similar product margins, a complementary product offering and a passion for providing great service to customers. We welcome the Partsmaster team and look forward to working with them, sharing best practices and driving growth through our entire organization.”
Of the $35.3 million price tag, Lawson paid $2.3 million of the purchase price at closing and will pay the remaining $33 million in May 2021. Excluding integration costs, Lawson expects the acquisition to be accretive starting in fiscal 2021 and expanding further into 2022 as it becomes fully integrated.
“We are excited to join an industry leader like Lawson Products. The transaction allows us to leverage our shared expertise and solid customer relationships to further expand our business,” said Partsmaster president, David Weiss. “The entire Partsmaster team will greatly benefit from Lawson’s expanded product offering and North American distribution capabilities while Lawson will acquire a highly trained sales force along with a wide array of proprietary products to not only keep customers running, but also reduce their parts, labor and downtime costs.”
DeCata concluded, “The addition of Partsmaster accelerates our three-part growth strategy through acquisitions, expanding our sales team and driving sales rep productivity. This is our seventh and largest acquisition in the past five years. We plan to continue to be opportunistic in utilizing our strong balance sheet to make accretive acquisitions to integrate complementary businesses that leverage our strong market position and operational infrastructure.”