As reported in these pages, the latest round of consolidation activity has a different look to it than in the 1990s. There’s more competition with an influx of private equity money this time. It remains to be seen if it will continue to drive prices paid, or whether it is just elevating expectations to levels where brain cells are starved of logic.

Either way, there are more options today for consolidators to achieve scale and buy market share. There even appears to be a new attempt on the roll-up concept, the popular and mostly unsuccessful consolidation vehicle in the 1990s.

As a result, we are seeing more creative options today for owners to position the company for either short- or long-term exit strategies. That’s why it was interesting to come across a slightly different exit strategy, as detailed in the lead article of this issue.

Bringing in a minority investor matched the needs of OneSource Distributors, an electrical distributor in Southern California. But there were other elements that had to align to make it a win-win. Will we see more deals like this? It’s likely as more capital flowing into distribution markets whether by larger strategic or financial buyers puts increasing pressure on the mid-sized and niche distributors to find a way to fund growth to compete, rather than sell out at the right time.

Creative, entrepreneurial distributors will find ways to increase and shift their value in local markets to stay competitive. Customers will continue to outsource functions and create stronger relationships with distributors who can provide specific, high-value services. The history of consolidation in distribution has shown there is a lot more involved in achieving long-term success than piles of money to invest.