Commentary: Year Ahead Looks More Positive, More Complex
As the lead article in this issue outlines, 2006 is looking more positive than six months ago. Good news. M& A activity is heating up. Most industry observers expect Home Depot's 12X EBITDA purchase price (almost double valuation multiples of two years ago) for Hughes Supply will continue to reverberate through the industry.
Yet nearly every conversation with distribution executives, particularly those with a majority of larger customers, raises concern about the longer-term economic fundamentals and health of distribution markets. The auto industry may be the most visible, but many large customers are in a state of flux with their manufacturing strategies and supply chain (putting it nicely). That's adding even more complexity for distributors to plan and manage a ...