The 2020 Mid-Year Economic Update_long

June 25 2012

Wave of Consolidation Hits the Industry

Volume:

42

Issue:

12

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Features

This article is part of the 2012 Distribution Trends Report. To access this annual update for premium subscribers, subscribe now or log-in.

Each year we say the big get bigger. And while that remains the case, we saw the big get much bigger thanks to a wave of mergers and acquisitions in 2011. That’s reflected on the 2012 MDM Market Leaders top distributor lists – which are at mdm.com/marketleaders.

The average growth for distributors on this year’s Top 40 Industrial Distributors list was 19.4 percent, a significant jump from the 10.4 percent we saw on last year’s list, in part due to acquisitions made throughout the year. Consolidation further ramped up in the first half of 2012.

Dozens of deals have been announced in distribution thanks to a perfect storm of contributing factors that include a large number of owners who are ready to retire, significantly improved deal valuations and ...

To continue reading ... subscribe or log-in.

 

 

 

 

Associate Editor Jenel Stelton-Holtmeier recently spoke with Wurth-North America CEO Robert Stolz about how the industrial distributor, which is part of the Germany-based Wurth Group, is approaching growth in U.S. markets.

MDM: It looks like Wurth-North America had some solid growth in 2011. What are some of the drivers of that growth?

Robert Stolz: We actually had double-digit growth in all four of our divisions: an industrial division; a wood division – which is construction materials; a metal division – which is MRO; and then an automotive division. That’s how we’re structured around the world and in North America.

As for what drove that growth, No. 1, of course, is we’re seeing the overall economy improve. I like to describe it as two steps forward, one step back. It’s very difficult still to plan or to set prognosis because we’ll have a couple of good quarters and then we’ll have a month that’s not as strong. But I think that’s the overall economy.

I also think we’re very focused on market share gain, and we’re pushing very hard in all four segments to pick up market share.

MDM: What’s the outlook for the rest of 2012?

Stolz: It’s interesting. I have moved from cautiously optimistic to optimistic. I think that in an economy like we’re in right now, well-capitalized and well-financed businesses will be very strong.

Of course, one of the things we’ve seen is that as you come out of a recession like this one, it puts a huge strain on working capital. If you think about it, when times are declining...

The economy in 2012 is proving to be consistently inconsistent. Anecdotally, we’re hearing of record-breaking months followed by slow ones; nearly all distribution sectors expect less in 2012, but still a year of moderate growth.

As Wurth-North America’s CEO Robert Stolz says in this issue of MDM: “It’s very difficult still to plan or to set prognosis because we’ll have a couple of good quarters and then we’ll have a month that’s not as strong.”

Making the most of more limited growth opportunities will …

In 2012, MDM is recognizing distributors that are innovative in their approach to their markets. Specialty building materials distributor C.H. Briggs is the first of two featured this year.

In wholesale distribution, “good enough” has long been a common theme for technology’s role in the business. But “good enough” was never good enough for C.H. Briggs, a specialty building materials distributor based in Reading, PA. “You can’t just accept what you’re told,” says CIO Scott Withers. “You have to ask yourself: What can this mean for me tomorrow?”

Following that philosophy has made C.H. Briggs a leader ...

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This article is part of the 2012 Distribution Trends Report. To access this annual update for premium subscribers, subscribe now or log-in.

Each year we say the big get bigger. And while that remains the case, we saw the big get much bigger thanks to a wave of mergers and acquisitions in 2011. That’s reflected on the 2012 MDM Market Leaders top distributor lists – which are at mdm.com/marketleaders.

The average growth for distributors on this year’s Top 40 Industrial Distributors list was 19.4 percent, a significant jump from the 10.4 percent we saw on last year’s list, in part due to acquisitions made throughout the year. Consolidation further ramped up in the first half of 2012.

Dozens of deals have been announced in distribution thanks to a perfect storm of contributing factors that include a large number of owners who are ready to retire, significantly improved deal valuations and ...

To continue reading ... subscribe or log-in.

 

 

 

 

Associate Editor Jenel Stelton-Holtmeier recently spoke with Wurth-North America CEO Robert Stolz about how the industrial distributor, which is part of the Germany-based Wurth Group, is approaching growth in U.S. markets.

MDM: It looks like Wurth-North America had some solid growth in 2011. What are some of the drivers of that growth?

Robert Stolz: We actually had double-digit growth in all four of our divisions: an industrial division; a wood division – which is construction materials; a metal division – which is MRO; and then an automotive division. That’s how we’re structured around the world and in North America.

As for what drove that growth, No. 1, of course, is we’re seeing the overall economy improve. I like to describe it as two steps forward, one step back. It’s very difficult still to plan or to set prognosis because we’ll have a couple of good quarters and then we’ll have a month that’s not as strong. But I think that’s the overall economy.

I also think we’re very focused on market share gain, and we’re pushing very hard in all four segments to pick up market share.

MDM: What’s the outlook for the rest of 2012?

Stolz: It’s interesting. I have moved from cautiously optimistic to optimistic. I think that in an economy like we’re in right now, well-capitalized and well-financed businesses will be very strong.

Of course, one of the things we’ve seen is that as you come out of a recession like this one, it puts a huge strain on working capital. If you think about it, when times are declining...

The economy in 2012 is proving to be consistently inconsistent. Anecdotally, we’re hearing of record-breaking months followed by slow ones; nearly all distribution sectors expect less in 2012, but still a year of moderate growth.

As Wurth-North America’s CEO Robert Stolz says in this issue of MDM: “It’s very difficult still to plan or to set prognosis because we’ll have a couple of good quarters and then we’ll have a month that’s not as strong.”

Making the most of more limited growth opportunities will …

In 2012, MDM is recognizing distributors that are innovative in their approach to their markets. Specialty building materials distributor C.H. Briggs is the first of two featured this year.

In wholesale distribution, “good enough” has long been a common theme for technology’s role in the business. But “good enough” was never good enough for C.H. Briggs, a specialty building materials distributor based in Reading, PA. “You can’t just accept what you’re told,” says CIO Scott Withers. “You have to ask yourself: What can this mean for me tomorrow?”

Following that philosophy has made C.H. Briggs a leader ...