January 2018 M&A Roundup: New Year Begins with a Bang

Market leaders kick off 2018 with sector-shifting transactions.

A pair of deals that will alter the landscape in the industrial and building materials sectors helped 2018 begin with a bang in distribution M&A, which is poised to accelerate throughout the year following this fast start.

Last month saw industrial distributor Applied Industrial Technologies, Cleveland, OH, No. 10 on MDM's list of the Top 40 Industrial Distributors, agree to acquire fluid power distributor FCX Performance Inc., Columbus, OH, for $768 million.

MDM CEO & Publisher Tom Gale outlined the deal in a blog last month, noting its significance because Applied’s fluid power segment, as reported in MDM's 2018 Competitive Landscape for Wholesale Distribution report, accounts for approximately $700 million, or more than 25 percent, of the company's total annual revenue.

The FCX acquisition, with expected 12-month revenue of $550 million, boosts Applied’s combined specialty fluid power and flow control businesses to close to 40 percent of total revenue.

Another notable deal from January saw HD Supply expand its footprint with the announcement that its Construction & Industrial – White Cap division (No. 8 on MDM's list of the Top 10 Building Materials & Construction Distributors) will acquire A.H. Harris Construction Supplies, Hartford, CT, for $380 million.

“The acquisition of A.H. Harris will be the single largest transaction HD Supply Construction & Industrial has ever made, and it will strengthen HD Supply’s position as the premier distributor in specialty construction," HD Supply Construction & Industrial President John Stegeman told MDM. "The combined company will allow us to better serve our customers in New England, New York, New Jersey, Pennsylvania, Washington, DC, Baltimore, Virginia and the Carolinas.”

"It’s a logical marriage between two former rivals that enhances HD Supply’s strengths in the marketplace," Tom Gale wrote in a recent blog. "It expands its national footprint, with an ability to attract more large, regional and national customers as well as consolidate purchases – and to some degree inventories – across its supply base. Within the region, the combination strengthens the combined companies’ marketing and merchandising capabilities."

Here are other key deals that occurred in January 2018:

Ferguson Acquires Duhig Stainless

SRS Distribution Acquires Venture Roofing & Building Supply

Bunzl Acquires Companies in the US and UK

Midwest Wholesale Hardware Acquires Strauss Lock Distributors

Arrow Electronics Acquires eInfochips

DXP Acquires Application Specialties

PRC Industrial Supply Acquires Ace Conveyor Services

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