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 by Platinum. Platinum owns two other related distribution companies -Strategic Distribution Inc. and Ryerson Inc.
Much of Strategic Distribution’s business, in particular, is focused on integrated supply; about 60 percent of IDG’s sales are in integrated supply, its fastest growing unit.
IDG recently reported sales for 2007 were $537.5 million, compared with $547.9 million in 2006, down 1.9 percent. Profit was $4.1 million, compared with $6.8 million last year. IDG is an industrial MROP distributor and provider of integrated supply solutions.
IDG was formed in 1997 through a rollup of nine industrial general-line distributors. The distributor first announced it was seeking strategic alternatives”for the company in August 2007.