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5 Big Industrial Distribution M&A Market Moves in 2012

Consolidation ramped up in wholesale distribution channels in 2012. Here are five highlights.
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Mergers and acquisitions among both wholesaler-distributors and manufacturers boomed in 2012.

This year, we saw an increase in activity from private equity firms; distributors continuing to expand their product capabilities; and growth across borders. We also saw a lot of movement among suppliers that sell through distribution. Read more about the wave of consolidation that has hit the distribution industry this year.

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Here are five of the biggest M&A stories  – in no particular order – in industrial distribution channels in 2012.

WESCO International Acquires Conney Safety Products, Makes Big Move in Canada
WESCO acquired one of the larger independent safety products distributors in the first half of the year, Conney Safety Products. Conney had $85 million in annual sales. The acquisition continued a trend over the past decade that has introduced new competitors to the safety products distribution landscape. Read more about that deal in Safety Products Distribution Landscape Grows Increasingly Busy.

WESCO also expanded this year with the big acquisition of EECOL Electric Corp., based in Alberta. EECOL has $900 million in annual sales with 57 locations across Canada and 20 locations in South America.

Learn more about the 2012 wholesale distribution M&A landscape in this MDM Webcast.

Manufacturer Acquisitions Ramp Up
Several manufacturer deals that will affect distribution markets have occurred over the past year. Stanley Black & Decker sold its hardware and home improvement group for $1.4 billion and purchased Powers FastenersBain Capital bought Apex Tool Group, the joint venture between Danaher and Cooper Industries; and Eaton purchased Cooper Industries. ABB acquired Thomas & Betts.

Rexel Acquires Platt Electric Supply
One of the biggest stories in the electrical distribution sector this year was the acquisition of West Coast electrical distributor Platt by Rexel. Previously family-owned, Platt Electric Supply has 111 branches in seven states and sales of $394 million in 2011. Oregon-based Platt was No. 16 on MDM’s list of the top 25 electrical distributors in 2012. In an interview, Rexel Holdings USA Spokesman Brad Greene said part of the attraction of the acquisition for Rexel was the lack of overlap between the two companies' footprints. "The Northwest is just one of those regions where we saw a lot of opportunity to grow," Greene said. Read more: Behind the Deal – Rexel’s Acquisition of Platt Electric Supply

Rexel also expanded internationally in 2012, with purchases in Brazil, the UK and Belgium.

Interline Brands Goes Private, McJunkin-Red Man Goes Public
Two large industrial distributors changed their ownership structures in 2012. Jacksonville, FL-based Interline Brands, No. 14 on MDM’s list of the top 40 industrial distributors, was acquired by two private equity firms in a transaction valued at $1.1 billion. The deal takes Interline private. (Interline also recently made a big move with the planned acquisition of JanPak for $82.5 million. JanPak has $232 million in sales, expanding Interline’s jan-san footprint.)

Fast-growing industrial PVF distributor McJunkin-Red Man Corp. filed for an IPO and changed its name to MRC Global. McJunkin and Red Man Pipe and Supply merged in 2007. Headquartered in Houston, TX, the distributor has rapidly grown both in the U.S. and internationally. It is No. 5 on MDM’s list of the top 40 industrial distributors.

HD Supply Continues Streamlining Business
HD Supply, Atlanta, GA, continued to pare down its operations in 2012 with the divestment of its industrial PVF division to Shale-Inland Holdings LLC, an affiliate of two private equity firms. CEO Joe DeAngelo told MDM the decision to sell off the business was an easy one. “It was a lot more speculative a business than we wanted to be in,” he said. Its “tremendous” working capital requirements and volatile ties to commodity markets were also challenges. Read more about that deal in Behind the Deal: HD Supply & Shale-Inland.

HD Supply also merged its electrical and utilities businesses under a new name, HD Supply Power Solutions. "The alignment of our businesses will allow us to provide our customers with additional products, solutions and enhanced services – ensuring they have what they need, when they need it, where they need it," said Rick McClure, president, HD Supply Power Solutions. 

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