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Border States
The distributor's major acquisition of Dominion Electric is just the latest piece in what has been a rapid 13-year expansion. Mike Hockett breaks down what Dominion adds to Border States and how it aligns with its growth history.

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Find deeper cybersecurity analysis, a case study on Motion, career advice from industry executives and best practices for knowledge transfer, talent management and more.

Market Insight Reports

The report features in-depth articles that recap the year that was 2023 in distribution dealmaking, a full rundown of every deal we covered in October-December, the latest EBITDA trading multiples and more.
Find a wealth of data and analysis extracted from the 3Q23 Baird-MDM Industrial Distribution Survey, including trending charts and figures for revenue and expectations, plus plenty of interesting commentary.
Find a wealth of data and analysis extracted from the 3Q23 Baird-MDM Industrial Distribution Survey, including trending charts and figures for revenue and expectations, plus plenty of interesting commentary.
Our 2023 third quarter M&A report features in-depth articles on activity by Ferguson and Veritiv, and chronicles the overall quarterly pace of new deals.
See MDM’s analysis of 2Q23 M&A activity pertaining to wholesale distributors, plus M&A financial benchmarks and recent Premium articles that had an M&A focus.

December 2006 sales of merchant wholesalers, except manufacturers' sales branches and offices, were $337.1 billion, up 1.8 percent from the revised November level and were up 8.6 percent from the December 2005 level. December sales of durable goods increased 1.1 percent from last month and were up 7.0 percent from a year ago. Compared to last month, sales of hardware and plumbing and heating equipment and supplies were up 4.2 percent and sales of motor vehicle and motor vehicle parts and supplies increased 2.9 percent. December sales of nondurable goods were up 2.5 percent from last month and were up 10.2 percent from last year.


Inventories . Total inventories of merchant wholesalers, except manufacturers' sales ...


Last week saw a feeding frenzy of rumors in distribution, with action on both sides of the Atlantic. The biggest hunters suddenly became the hunted.


The history of independent distribution channels has repeatedly provided pointed lessons that size, more often than not, is the real giant slayer. It is tough to institutionalize flexibility and strong service levels - the hallmark of local distribution - across states, much less international borders. The next few years may tell whether there is an opportunity to create a global platform that doesn't self destruct on its own growth plans.


Some might say too much money is overheating valuations and expectations. The surprise is that the M & A market in distribution (and overall) remains hot in 2007, with most expecting ...

Release taken from Statistics Canada


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Wholesalers ended the year on a high note, with the automotive sector providing much of the impetus for the largest monthly gain in over two years.


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Wholesale sales jumped&nbsp ; 2.7% in December to&nbsp ; $42.8&nbsp ; billion, following a 0.3% rise in November. December's increase was the largest since March&nbsp ; 2004.


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While a solid showing by the automotive sector (+7.5%) was behind much of December's rise, there were also notable gains in the other products" (mainly agricultural products, chemicals and recycled metals), personal and household goods and building materials sectors. Three sectors registered drops in ...

Taken from Statistics Canada


Canadian manufacturers ended&nbsp ; 2006&nbsp ; on a positive note as factory shipments increased for the second month in a row in December, thanks to strength in the transportation equipment sector.


The year-end rally was not enough to offset several months of weak performances earlier in the year. As a result, total shipments for&nbsp ; 2006&nbsp ; as a whole edged down&nbsp ; 0.6% to&nbsp ; $587.4&nbsp ; billion from the peak level in&nbsp ; 2005.


December's increase was widespread, with&nbsp ; 13&nbsp ; sectors representing&nbsp ; 74% of total output improving. On a monthly basis, factories shipped goods worth an estimated&nbsp ; $49.7&nbsp ; billion in ...

Privately-owned housing starts fell 14.3% in January, compared with the revised December estimate. Starts were down 37.8% below the January 2006 rate. Single-family in January were 11.2% below the December figure. The January rate for units in buildings with five units or more was 276,000.



Privately-owned housing units authorized by building permits in January were down 2.8% from the revised December rate, and 28.6% below the January 2006 estimate. Single-family authorizations were 4% below the December figure. Authorizations of units in buildings with five units or more were at a rate of 370,000 in January.


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Privately-owned housing completions in January were at a seasonally adjusted annual rate of 1,880,000, roughly even with the revised ...

The Producer Price Index for Finished Goods declined 0.6 percent in January, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported. This decrease followed a 0.9-percent advance in December and a 1.8-percent jump in November. At the earlier stages of processing, prices for intermediate goods moved down 0.7 percent compared with a 0.5-percent increase in the prior month. The crude goods index decreased 6.3 percent after rising 2.8 percent in December.


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Among finished goods, prices for energy goods fell 4.6 percent in January following a 2.2-percent rise in the prior month. The rate of increase in the finished consumer foods index slowed to 1.1 percent in January from 1.5 percent in December. By contrast, prices for finished ...

December U.S. manufacturing technology consumption totaled $321.35 million, according to The Association For Manufacturing Technology and the American Machine Tool Distributors' Association. This total, as reported by companies participating in the USMTC program, was down 6.9% from November, and down 0.5% from the total of $322.81 million reported for&nbsp ; December 2005. With a year-end total of $3,889.75 million, 2006 was up 26.8% compared with 2005.


These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTC program.


2006 was an exceptional year, with the highest U.S. consumption since 2000, says John B. Byrd III, AMT President. Growth should continue in 2007, at a more modest pace, as ...


Adam Fein, president of Pembroke Consulting, identifies four key trends in Facing the Forces of Change: Lead the Way in the Supply Chain, put together every three years by the National Association of Wholesaler-Distributors. He described these trends in a presentation at the NAW annual meeting in Washington, D.C., last month.


No. 1: Private Label
Adam Fein, author of Facing the Forces of Change: Lead the Way in the Supply Chain, says the use of private-label products will expand substantially over the next few years.


Benefits of a private-label strategy include capturing the manufacturer's margin, and the ability to control profit from the top to the bottom of the supply chain. Customer relationships often improve thanks to lower ...

W.W. Grainger, Chicago, IL, has released its updated 2007 catalog with more than 138,000 MRO products, an increase of 23,000 over last year.


Last year, the distributor increased its catalog by 40 percent, adding 39,000 new products.


This year Grainger has added more than 7,000 plumbing products, including high-grade pipes, valves and fittings; 4,000 material handling supplies such as conveyors, hoists and casters; 5,000 fasteners including nuts, bolts and screws; as well as 1,600 security products including locks and hinges.


The company expects incremental sales from its ongoing product expansion to account for 1 to 2 percentage points of its growth in 2007. The new catalog has more than 3,000 pages.


In addition, online Grainger has added new search and ...

Prices charged by manufacturers in Canada, as measured by the Industrial Product Price Index (IPPI), were up&nbsp ; 1.4 percent in December from the month before thanks to a significant increase in prices for petroleum and coal products, primary metal products, and motor vehicles. Higher prices were observed in the majority of product groups.


On a 12-month basis, the IPPI rose by&nbsp ; 3.6 percent, a higher rate of growth than the year-over-year increase recorded between September and November. The upward pressure came mainly from higher prices for primary metal products, pulp and paper products as well as fruit, vegetables and feed products.



Petroleum, Coal Drive Prices
On a month-over-month basis, manufacturers' prices were driven by ...
Modern Distribution Management's December Inflation Index, which measures a cross-section of industrial supplies, was up 0.23% from the previous month, and up 3.47% from December 2005.


Summary of&nbsp ; MDM Inflation Index for the past 12 months:

December 2006 Index&nbsp ; 267.1
November 2006 Index 266.5
October 2006 Index 265.9
September 2006 Index 265.6
August 2006 Index 265.2
July 2006 Index 264.0
June 2006 Index 263.0
May 2006 Index 262.1
April 2006 Index 262.1
March 2006 Index 262.1
Febuary 2006 Index 261.2
January 2006 Index 260.2
December 2005 Index 258.1


Please click below on Related Document to view a print-ready pdf of the&nbsp ; MDM Inflation Index for December 2006, listing the ten ...


Abrasives represented a market in 2006 of $2.76 billion, according to estimates by Industrial Market Information, Minneapolis.



These charts show the top ten industries, by SIC code, consuming these products; and the 2006 end-user consumption of these groups sorted by the nine government market regions.


Click on Related Document below to view a pdf of the chart and end-user consumption by region.

...

Prices charged by manufacturers in Canada, as measured by the Industrial Product Price Index (IPPI), were up&nbsp ; 1.4% in December from the month before thanks to a significant increase in prices for petroleum and coal products, primary metal products, and motor vehicles. Higher prices were observed in the majority of product groups.


&nbsp ;


On a 12-month basis, the IPPI rose by&nbsp ; 3.6%, a higher rate of growth than the year-over-year increase recorded between September and November. The upward pressure came mainly from higher prices for primary metal products, pulp and paper products as well as fruit, vegetables and feed products.


&nbsp ;


The Raw Materials Price Index (RMPI) was up by&nbsp ; 5.2% from November to December, closing the year ...
Economic activity in the manufacturing sector contracted in January after a one-month expansion, while the overall economy grew for the 63rd month, according to the latest manufacturing ISM Report on Business.


After a slight rebound in December, the manufacturing sector did not grow in January. New Orders remained positive, but little change has taken place as the PMI has averaged 50.5% in the past four months. In overall terms, manufacturing lost momentum in the second half of 2006 and is starting 2007 in a less than robust fashion, according to the Institute for Supply Management.


Results show a decline in the Inventories Index to the lowest level since February 2002, indicating a significant liquidation is taking place in many supply chains. ...

Company Snapshot

  • One distribution center and five branches, based in Livonia, MI.
  • Number of employees: 58
  • Key products: Bearings and power transmission

We strive to be problem-solvers in the marketplace by providing end-user training. It's a service the customer values and one that our competition can't easily duplicate. It adds real value to what we offer and helps us build stronger relationships with our end users.

More than eight years ago we began receiving requests from customers for maintenance-related training. We viewed these requests as opportunities for us to grow our business.

We sat down with those customers to determine the specific areas where they needed ...


Dear Editor:



I would like to disagree with MDM's editorial on Home Depot (MDM Jan. 10, 2007) - on several levels.



1) The job of company management, within certain limits, is to maximize shareholder value. HD stock was over $43 in 2000. According to the inflation calculator provided (on the Web) by the Bureau of Labor Statistics, that adjusts (for inflation) to about $50 in 2006. I would guess it will adjust another dollar higher in 2007 money, so make it $51.


Essentially, HD paid Bob Nardelli more than $450 million over six years to go backwards. The spending power of the money invested in HD stock by shareholders who bought the stock the day he was named Big Cheese DECLINED. You cite Nardelli's accomplishments. If he's not responsible for ...

Sales. November 2006 sales of merchant wholesalers, except manufacturers' sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $331.3 billion, up 1.0% from the revised October level and were up 7.9% from the November 2005 level. November sales of durable goods increased 1.2% from last month and were up 7.7% from a year ago. Compared to last month, sales of motor vehicle and motor vehicle parts and supplies were up 5.0% and sales of electrical and electronic goods increased 2.9 %. November sales of nondurable goods were up 0.7% (+/-0.7%) ...

As the lead article in this issue illustrates, the inflation threat largely driven in 2005 by energy price hikes has moderated, particularly the last few months of the year. Wholesale prices rose 1.1 percent in 2006, compared to 5.4 percent in 2005. But wholesale prices except food and energy - the core inflation rate - moved up 2 percent in 2006 following a 1.4 percent gain in 2005.


Distributors need to look more closely at the stats in their own sectors, as there are a lot of mixed signals. Materials for durable manufacturing increased 13 percent in 2006; prices for materials/components for construction increased 4.3 percent.


But as these pages pointed out (Adam Fein article in Nov. 10, 2006 MDM), distributors really need to watch steroid revenue growth produced ...

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