Value Added Distributors and Exotic Automation & Supply have merged, creating a 38-location industrial fluid power and automation distribution and fabrication platform spanning the Midwest and South.

Shawano, WI-based VAD is a portfolio company of private equity firm Rotunda Capital Partners, which invested in the distributor in 2024. Financial terms of the merger were not disclosed.

Founded in 1995, VAD distributes hoses, tubes, seals, couplings and related products to specialty vehicle original equipment manufacturers and other mobile fluid power customers. The company operates 18 facilities and provides custom fabrication, assembly, kitting and vendor managed inventory services.

New Hudson, MI-based Exotic was founded in 1963 and operates 20 locations across Michigan and Indiana. Its portfolio includes custom hoses and fittings, hydraulic and pneumatic components, filtration, lubrication equipment, molded rubber products, engineered power units and compressed-air equipment and services, primarily serving industrial MRO customers.

The companies said the combination will expand their vendor and customer bases while adding scale across operations, warehousing, information technology, finance and human resources. The combined distributor will serve industrial MRO, industrial OEM and mobile-equipment customers.

Both companies are major Parker Hannifin distributors. Exotic said their combined network will include 24 ParkerStores across Michigan, Wisconsin and Indiana.

VAD Chief Executive Mike Kostelnik will remain CEO of the combined company, while Exotic President Steve Orlando will become president. Exotic CEO Tom Marino will remain an equity holder and join the combined company’s board of directors. Exotic separately said Marino will retire from his executive role.

Both leadership teams and other key managers will remain with the business, the companies said.

“The combination of VAD and Exotic allows us to serve a broad range of MRO, industrial OEM and mobile customers,” Orlando said. “Integrated, we become a super-regional, scaled industrial fluid power and automation distributor and fabricator.”

Rotunda’s initial investment thesis for VAD emphasized expansion through new locations and acquisitions in adjacent categories, including filtration, gaskets, wire harnesses and motion control systems. VAD expanded its wire-harness manufacturing capabilities in December through the acquisition of L.T.L. Supply.

MDM Analysis

The merger meaningfully broadens VAD beyond its mobile fluid power and OEM foundation by adding Exotic’s industrial MRO, automation, pneumatic, electromechanical, rubber, plastics and compressed-air capabilities. Exotic gains access to VAD’s fabrication, kitting and embedded inventory programs, creating cross-selling opportunities across a wider customer base. With 38 locations, a deep Parker relationship and Rotunda’s backing, the combined business now has the scale and product breadth of a significant super-regional competitor — and a stronger foundation for continued acquisition-driven expansion in the fragmented fluid power and automation market.