distribution market. & hellip; DXP maintains 19 on-site integrated supply locations.
No. 6 & ndash;   ; The combination of DXP and Precision presents an opportunity to strengthen brand impressions with both existing and new customers and suppliers, while selling new products and services that independently neither businesses could have done alone. Currently, Precision has over 780 lines that DXP does not offer. DXP has over 449 lines Precision does not offer. We clearly see opportunity to realize incremental revenue from a broader and deeper product line. “
;Power transmission and bearing distributor DXP Enterprises, Inc., Houston, TX, has finished its acquisition of Precision Industries for $106 million. The acquisition is DXP’s largest and nearly doubles the distributor’s size. Precision has a run rate of $250 million in sales in 2007. In the Aug. 25, 2007, issue of MDM, we presented Precision’s reason for selling the company. Recently, DXP held a conference call on the purchase and shared its reasons for making the acquisition. The following is an excerpt from comments made by DXP CEO David Little during that call:
Precision Industries fits within our primary acquisition criteria of acquiring companies that allow us to gain access to new geography, strengthen our product and service offering and have established and accomplished senior management and employee base who have the drive and desire to stay with the business and accelerate growth in the future. Precision’s extensive branch network, its integrated supply platform, and its people truly differentiate the company and present a unique opportunity for DXP for a variety of reasons.
No. 1 & ndash;   ; As you can imagine, a company like Precision has had many different suitors over the years. We were able to get to the finish line with Precision in large part because both companies share many common values including our culture, our management philosophy, and the value we place on our people.
The senior management team in charge of Precision’s day-to-day operations has decided to join DXP. This team, led by Chris Circo, will ensure operational continuity and bring significant expertise in the Integrated Supply business and in product sourcing to the combined company.
No. 2 -Precision sells a broad range of over 250,000 products listed in their catalog representing over 7,000 supplier lines. DXP offers over 53,000 SKUs representing over 4,500 supplier lines including pumps, bearings, power transmission, seals, hose, safety, and electrical and general industrial supplies. Combined there are several major product categories that overlap. This presents a great opportunity to strengthen our purchasing power.
There are 10 product categories & hellip; that have little to no overlap. These product categories will give us greater product depth and value-added services to grow our existing customers. & hellip; Combined DXP and Precision represent 94 branches with less than five cities with overlapping locations. The transaction provides a growing national footprint that will enable our company to compete in the national accounts business, specifically with multiple product categories. Additionally, the combined platform will allow us to pursue additional tuck-in acquisitions more aggressively.
No. 3 -Precision’s two largest end markets consist of food & beverage, and transportation. Combined these categories represent over 58 percent of Precision’s sales.
DXP’s largest end market, oil & gas, represents approximately 40 percent of sales. Going forward the combined company will have much less concentration in one industry. Reducing end-market concentration and overall more balanced end-markets for the two businesses means less cyclicality and seasonality on a go-forward basis.
No. 4 -There are two ways we can benefit from purchasing synergies: First, where both Precision and DXP are major buyers of a specific product, the purchasing power of the combined company will help us drive cost savings. Secondly, there are certain product categories in which DXP or Precision has an individual volume and purchasing advantage which can be applied to the combined company to generate savings.
No. 5 -We believe that integrated supply will continue to gain importance to customers as they continue to drive more of their supply chain to outsource providers. Precision with 55 on-site integrations is a market leader in providing integrated supply solutions to the