Grainger (NYSE: GWW) plans to continue using acquisitions as a strategic growth vehicle, particularly in the manufacturing segment, an area Grainger has been focused on in the past year.
Recently Grainger announced the acquisition of Safety Solutions, an Ohio-based distributor of safety footwear, supplies and services with a strong focus on the manufacturing sector.
During the distributor’s annual analyst day, Grainger Americas Group President Court Carruthers said the distributor is already benefiting from two similar acquisitions it made in the past year: E&R Industrial and Techni-Tool.
E&R Industrial is a metalworking specialist, with technical expertise and a broad product offering, Carruthers said.
In line with Grainger’s past approaches to integration, it is taking E&R’s historical focus on in the Midwest and leveraging the acquired distributor’s offerings throughout the U.S. and strengthening Grainger’s ability to serve the metalworking market.
Techni-Tool, based in Pennsylvania, has allowed the distributor to “further penetrate the plant floor.” Carruthers said that Techni-Tool has “very specific expertise” in high-tech manufacturing with services targeted at the test bench, a part of the manufacturing environment Grainger has not traditionally called on.
Carruthers said that additional capability has already helped the distributor win additional business. In one account, he said, the distributor was able to convince the customer to consolidate test-bench product with the MRO spend, adding 17 more tool cribs to the contract and an additional $3 million in revenue.
As for the latest acquisition – Safety Solutions – the distributor said in a press release its capability to track purchasing and compliance for customers was attractive.
Expect to see ongoing focus on acquisitions and other initiatives supporting this segment. As Laura Brown, senior vice president of communications and investor relations, said earlier this year: “Our continued success with manufacturing customers further reinforces our commitment to add products and services to best serve customers in this important end-market.”
