The 2020 Mid-Year Economic Update_long

April 25 2008

Volume 38, Issue 8 - 04/25/2008

Volume:

38

Issue:

8

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Features
Al Bates, founder and chairman of Profit Planning Group, Boulder, CO, wants to change how distribution executives think about their business. In this interview, he addresses dysfunctional behavior, alternatives to typical mindsets and ways that distributors can manage better in a turbulent economy. Based on his experience as a corporate financial planner and decades of data analysis, he's not afraid to buck conventional wisdom. In fact, he enjoys it.
Bates has studied financial performance across dozens of wholesale distribution sectors for more than 25 years. His firm conducts the annual benchmarking report series, PAR reports, for more than 40 wholesale distribution associations. This interview discusses key themes from his new book, Profit Myths in Wholesale Distribution: ...
The bidding war for industrial distributor Industrial Distribution Group Inc., Atlanta, GA, continues, but WESCO Distribution Inc., Pittsburgh, PA, has bowed out. At press time (early April 25, 2008), Luther King Capital Management, Fort Worth, TX, had the highest bid with $12.10 per share in cash, or close to $134 million.


Luther King Capital current owns 15 percent of IDG's stock. The firm presented IDG with an equity financing commitment letter from an LKCM investment fund.

Platinum Equity, the original victor with its offer of $10.30 per share for the distributor, had upped its bid to $11.80 per share in cash in response to WESCO Distribution's bid of $11.75, or $130 million.

The back and forth comes after IDG agreed in February 2008 to be purchased ...
Why have three investors been raising the price for Industrial Distribution Group (IDG), the traditional whipping post of the investment community?


Last year, when IDG's board pursued an exit strategy to free itself from the constraints of public ownership, the M&A market in distribution was still near its peak. In a year's time, we have shifted dramatically from a financial frenzy to a quieter, more strategic buyer's market. In today's risk-averse debt markets, show me the money has taken on new meaning in the bidding war for IDG.

The three bidders active in this deal -Platinum Equity (owns Strategic Distribution), Luther King Capital Management (owns 15 percent of IDG stock), and WESCO (owns Bruckner Supply) -know the strengths and weaknesses in IDG. Based on ...
These 24 select product groups provide a snapshot of inflation trends based on the Producer Price Index from the U.S. Bureau of Labor Statistics. First quarter 2008 is compared with first quarter 2007, and fourth quarter 2007 with first quarter 2008. Download the full document below.
 
The product groups in this report:
 



<td style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; BORDER-LEFT-COLOR: #d4d0c8; BORDER-BOTTOM-COLOR: #d4d0c8; PADDING-BOTTOM: 0in; WIDTH: 208.9pt; BORDER-TOP-COLOR: #d4d0c8; PADDING-TOP: 0in; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent; ...
MSC Industrial Direct's latest Safety Products Catalog launch is part of its strategy to further penetrate existing customer accounts, according to Erik Gershwind, MSC's senior vice president of product management, marketing and strategy.

The interest in safety products has been building in our customer base for the past few years,"Gershwind said. "We definitely saw a demarcation point after 9/11. Our customer base has a heightened sense of awareness of keeping the workplace safe and protecting the well-being of their employees."

Gershwind said that penetration of existing accounts was a key growth strategy for the industrial distributor, based in Melville, NY. The company is also working to sell more MRO and safety products to customers acquired when it bought J&L ...
Crawford Electric Supply, Dallas, TX, a subsidiary of Sonepar USA, has opened a new branch in New Orleans, LA. The facility includes a 48,000-square-foot warehouse, with a full-service counter area focused on the pipe, wire, lighting, and electrical business. More

PrimeSource Building Products Inc., Carrollton, TX, will buy Miami, FL-based Coast to Coast Building Products Inc., according to news reports. The acquisition expands PrimeSource's network into the Southeast as well as the Caribbean and Central America. More

HD Supply, Atlanta, GA, has launched its two new proprietary brands, Seasons and Brigade. The ...
Modern Distribution Management's March Inflation Index, which measures a cross-section of industrial supplies, was up 0.74% from the previous month, and up 4.24% from March 2007.
 
Summary of MDM Inflation Index for the past 12 months:
 
March 2008 Index 281.1
February 2008 Index 279.0
January 2008 Index 277.2
December 2007 Index 275.9
November 2007 Index 274.7
October 2007 Index 273.6
September 2007 Index 273.5
August 2007 Index 273.3
July 2007 Index 272.4
June 2007 Index 271.7
May 2007 Index 271.2
April 2007 Index 270.8
March 2007 Index 269.6

Please click below to view a print-ready pdf of the MDM Inflation Index for March 2008, listing the ten individual product categories that make up the ...
This table highlights key financial metrics and trading multiples for 30 publicly traded distributors in the industrial and building products industries up to March 31, 2008. Download this data below. Also find graphic illustrating median EBIDTA multiples for the same distribution ...
This is the pdf of this issue of Modern Distribution Management. Apply the full $24.95 pay-per-view cost toward an annual subscription (within 30 days of purchase), which includes two issues a month plus access to more than six years of online archives and market data. Call 1-888-742-5060 or email info@mdm.com to ...
PDF Download
Al Bates, founder and chairman of Profit Planning Group, Boulder, CO, wants to change how distribution executives think about their business. In this interview, he addresses dysfunctional behavior, alternatives to typical mindsets and ways that distributors can manage better in a turbulent economy. Based on his experience as a corporate financial planner and decades of data analysis, he's not afraid to buck conventional wisdom. In fact, he enjoys it.
Bates has studied financial performance across dozens of wholesale distribution sectors for more than 25 years. His firm conducts the annual benchmarking report series, PAR reports, for more than 40 wholesale distribution associations. This interview discusses key themes from his new book, Profit Myths in Wholesale Distribution: ...
The bidding war for industrial distributor Industrial Distribution Group Inc., Atlanta, GA, continues, but WESCO Distribution Inc., Pittsburgh, PA, has bowed out. At press time (early April 25, 2008), Luther King Capital Management, Fort Worth, TX, had the highest bid with $12.10 per share in cash, or close to $134 million.


Luther King Capital current owns 15 percent of IDG's stock. The firm presented IDG with an equity financing commitment letter from an LKCM investment fund.

Platinum Equity, the original victor with its offer of $10.30 per share for the distributor, had upped its bid to $11.80 per share in cash in response to WESCO Distribution's bid of $11.75, or $130 million.

The back and forth comes after IDG agreed in February 2008 to be purchased ...
Why have three investors been raising the price for Industrial Distribution Group (IDG), the traditional whipping post of the investment community?


Last year, when IDG's board pursued an exit strategy to free itself from the constraints of public ownership, the M&A market in distribution was still near its peak. In a year's time, we have shifted dramatically from a financial frenzy to a quieter, more strategic buyer's market. In today's risk-averse debt markets, show me the money has taken on new meaning in the bidding war for IDG.

The three bidders active in this deal -Platinum Equity (owns Strategic Distribution), Luther King Capital Management (owns 15 percent of IDG stock), and WESCO (owns Bruckner Supply) -know the strengths and weaknesses in IDG. Based on ...
These 24 select product groups provide a snapshot of inflation trends based on the Producer Price Index from the U.S. Bureau of Labor Statistics. First quarter 2008 is compared with first quarter 2007, and fourth quarter 2007 with first quarter 2008. Download the full document below.
 
The product groups in this report:
 



<td style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; BORDER-LEFT-COLOR: #d4d0c8; BORDER-BOTTOM-COLOR: #d4d0c8; PADDING-BOTTOM: 0in; WIDTH: 208.9pt; BORDER-TOP-COLOR: #d4d0c8; PADDING-TOP: 0in; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent; ...
MSC Industrial Direct's latest Safety Products Catalog launch is part of its strategy to further penetrate existing customer accounts, according to Erik Gershwind, MSC's senior vice president of product management, marketing and strategy.

The interest in safety products has been building in our customer base for the past few years,"Gershwind said. "We definitely saw a demarcation point after 9/11. Our customer base has a heightened sense of awareness of keeping the workplace safe and protecting the well-being of their employees."

Gershwind said that penetration of existing accounts was a key growth strategy for the industrial distributor, based in Melville, NY. The company is also working to sell more MRO and safety products to customers acquired when it bought J&L ...
Crawford Electric Supply, Dallas, TX, a subsidiary of Sonepar USA, has opened a new branch in New Orleans, LA. The facility includes a 48,000-square-foot warehouse, with a full-service counter area focused on the pipe, wire, lighting, and electrical business. More

PrimeSource Building Products Inc., Carrollton, TX, will buy Miami, FL-based Coast to Coast Building Products Inc., according to news reports. The acquisition expands PrimeSource's network into the Southeast as well as the Caribbean and Central America. More

HD Supply, Atlanta, GA, has launched its two new proprietary brands, Seasons and Brigade. The ...
Modern Distribution Management's March Inflation Index, which measures a cross-section of industrial supplies, was up 0.74% from the previous month, and up 4.24% from March 2007.
 
Summary of MDM Inflation Index for the past 12 months:
 
March 2008 Index 281.1
February 2008 Index 279.0
January 2008 Index 277.2
December 2007 Index 275.9
November 2007 Index 274.7
October 2007 Index 273.6
September 2007 Index 273.5
August 2007 Index 273.3
July 2007 Index 272.4
June 2007 Index 271.7
May 2007 Index 271.2
April 2007 Index 270.8
March 2007 Index 269.6

Please click below to view a print-ready pdf of the MDM Inflation Index for March 2008, listing the ten individual product categories that make up the ...
This table highlights key financial metrics and trading multiples for 30 publicly traded distributors in the industrial and building products industries up to March 31, 2008. Download this data below. Also find graphic illustrating median EBIDTA multiples for the same distribution ...
This is the pdf of this issue of Modern Distribution Management. Apply the full $24.95 pay-per-view cost toward an annual subscription (within 30 days of purchase), which includes two issues a month plus access to more than six years of online archives and market data. Call 1-888-742-5060 or email info@mdm.com to ...