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We benchmarked the results of a large-scale poll on distributors’ AI usage against that of a year earlier, and the findings were eye-opening. This piece examines the comparative results.

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This issue addressed what went wrong with MSC’s web pricing realignment and what they’ve done about it; the role of diversification in our 2024 Top Distributors feature; using analytics to build profit; and disruption updates from The Home Depot and Amazon Business.
This issue addressed cognitive biases’ impact on analytics ROI; distributors’ top business risks; Sonepar’s acquisition journey; a case study on rooftop solar; and more.

Market Insight Reports

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Find a wealth of data and analysis extracted from the 1Q24 Baird-MDM Industrial Distribution Survey, including trending charts and figures for revenue and expectations, plus plenty of interesting commentary.
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.

Overall U.S. construction in 2007 is forecast to slow from previous levels, thanks to a downturn in residential building, according to recent reports. But nonresidential construction should stay relatively strong in the new year, with institutional and commercial building leading the way.


McGraw-Hill Construction reports total construction starts will drop 1 percent in 2007. Housing starts will fall 5 percent, with both single and multifamily housing taking a hit.


A large backlog in unsold homes suggests home construction may be slow to turn around, but most analysts expect declines to moderate in 2007, according to the Fed. Housing demand may also improve in 2007.


McGraw-Hill reports that retail construction will decline as housing starts slow. Retail ...

MSC Industrial Direct Inc., Melville, NY, said in a recent conference call with investors that it has seen a slowdown in revenue growth in the past few months.


We're mindful of the ISM index and its historic correlation to our growth rate, CEO David Sandler said of the Institute for Supply Management's monthly manufacturing report. While we believe a number of marketing and sales initiatives will moderate its impact … it is apparent that three to six months of ISM weakness has modestly affected our revenue growth and will probably continue to do so in the next couple of quarters if past experience proves out."


Still, thanks in part to its acquisition of J & L Industrial Supply last year from Kennametal, the industrial MRO distributor recorded an increase in sales ...

Strategic Distribution, Inc., Bristol, PA, has agreed to be bought out by Platinum Equity in a deal worth $30 million. The deal stipulates that Strategic Distribution will merge with Project Eagle Holding Corp. and Project Eagle Merger Corp., each a Platinum Equity portfolio company. Strategic reported revenues of $136.9 million in 2005 and a net loss of $3.4 million. Platinum Equity has been busy in the industrial sector, recently buying Textron Fastening Systems for $630 million and PNA Group Inc., a $1.2 billion processor and distributor of steel products. More ...

Kennametal Inc., Latrobe, PA, has agreed to acquire Federal Signal ...

Modern Distribution Management's November Inflation Index, which measures a cross-section of industrial supplies, was up 0.20% from the previous month, and up 4.04% from November 2005.

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

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
November 2005 Index&nbsp ; 256.1


Please click below on Related Document to view a detailed calculation of the&nbsp ; MDM Inflation Index for November 2006, listing the ten ...


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% (+/-0.5%) from the revised October level and were up 7.9% (+/-1.2%) from the November 2005 level. The October preliminary estimate was revised upward $0.4 billion or 0.1%. November sales of durable goods increased 1.2% (+/-0.8%) from last month and were up 7.7% (+/-1.8%) from a year ago.&nbsp ;


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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%) ...

November U.S. manufacturing technology consumption totaled $335.02 million, according to AMTDA, the American Machine Tool Distributors' Association, and AMT - The Association for Manufacturing Technology.


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This total, as reported by companies participating in the USMTC program, was down 12.3% from October, but up 32.7% from the total of $252.38 million reported for November 2005. With a year-to-date total of $3,549.90 million, 2006 was up 29.4% compared with 2005.


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


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Though below the exceptional September peak, the November results continue to show strong purchases of advanced ...

Hype and speculation tend to follow an industry consolidator. The announcement last week that Home Depot CEO Bob Nardelli was ousted from his position over pay issues and lagging stock gains generated an inordinate amount of buzz. Some even claimed it is a repudiation of the Home Depot model itself and its relatively recent strategy to aggressively grow the wholesale distribution division.


Hardly. All we know versus a week ago is that HD has $210 million less to fund acquisition activities that instead went to Mr. Nardelli's severance package (Wouldn't you like to be chastised like that?). Now that will really slow the acquisition pace of HD Supply….


What's lost in the shock value of the pay deal is that Home Depot's net income in the most recent quarter, ended ...
This is the pdf of this issue of Modern Distribution Management. Apply the full $24.95 pay-per-view cost toward an annual subscription (within 30 days of purchase), which includes two issues a month plus access to more than six years of online archives and market data. Call 1-888-742-5060 or email info@mdm.com to ...

Hagemeyer has acquired BREVA, an electrical wholesaler-distributor of MRO products in Belgium. About 70% of BREVA's sales go to industrial customers.


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The acquisition provides Hagemeyer an entrance to the Belgian market and will allow Hagemeyer to serve the Belgian subsidiaries of its large global industrial customers.


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BREVA is headquartered in Zonhoven, Belgium.


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Hagemeyer has had revenues of &nbsp ; 4.6 billion in the first nine months of 2006. More than 90% of Hagemeyer's total revenue is generated by its core Professional Products and Services, which focuses on the value-added business-to-business distribution of electrical parts and supplies, safety and other Maintenance, Repair and Operations products in ...

HD Supply Waterworks, a subsidiary of The Home Depot, has agreed to acquire Sioux Pipe, Inc., a water and sewer distributor with two locations in South Dakota.


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With the addition of Sioux Pipe, HD Supply Waterworks creates a presence in South Dakota.


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HD Supply Waterworks supplies products in building, repairing and maintaining water and wastewater systems. It is part of HD Supply, Home Depot's wholesale division.


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Related Links:
Home Depot CEO Nardelli Resigns
HD Supply Sales Increase 159% in Third Quarter
<A ...

Cooper Electric Supply Co., Tinton Falls, NJ, has acquired Fairview Electrical Supply Corp., Fairview, NJ.


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Cooper Electric serves the New Jersey, New York and Pennsylvania markets. This acquisition increases its presence to 30 locations in the tri-state area.


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Fairview Electrical Supply Co. is in Northern New Jersey with a customer footprint in both New Jersey and New York.

More Breaking ...

Border States, Fargo, ND, has agreed to buy Minnesota Electric Supply Company, a full line provider of electrical products with eight locations in Minnesota and more than 3,000 customers.


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According to Electrical Wholesaling's top 200, Border States had 2005 revenues of $601 million, and Minnesota Electric had sales of $78.3 million.


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Border States provides products and services to the construction, industrial, utility and data communications markets. The combined organization will have more than 1,200 employees and 51 branch operations in 11 states and Mexico.


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More Breaking News


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Sonepar USA, Philadelphia, PA, has acquired Dallas, TX-based Crawford Electric Supply Company, Ltd. Crawford Electric had sales of $175 million in 2005, according to Electrical Wholesaling's 2006 top 200 issue.


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The acquisition extends Sonepar USA's reach into the fast-growing Texas market.


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Crawford has locations in Dallas, Fort Worth, Houston and San Antonio. The company offers electrical and lighting products to commercial and residential contractors.


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The purchase is Sonepar USA's seventh acquisition in less than two years. Consistent with all Sonepar USA acquisitions, CESCO will retain its brand identity and autonomy.


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Sonepar USA is a member of the Sonepar group - a global ...

Air Products, Lehigh Valley, PA, has agreed to acquire the industrial gas business of Central Europe-based BOC Gazy Sp z o.o. from Linde Gas for 370 million euros (US$481 million).&nbsp ;


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For regulatory purposes, BOC Gazy was required to be sold by Linde as a result of its purchase of The BOC Group plc in September 2006.


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The BOC Gazy business had fiscal year 2006 sales of 126 million euros ($164&nbsp ; million).&nbsp ; The business has 750&nbsp ; employees, five industrial gas plants and six cylinder transfills serving customers across a diverse range of industries, including chemicals, steel and base metals, among others.


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"We're taking advantage of a unique opportunity to become the number one industrial ...

Strategic Distribution, Inc., Bristol, PA, has agreed to be bought out by Platinum Equity for $30 million.


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The transaction is expected to be complete by the end of March. The deal stipulates that Strategic Distribution will merge with Project Eagle Holding Corp. and Project Eagle Merger Corp., each a Platinum Equity portfolio company.


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The MRO distributor reported revenues of $136.9 million in 2005 and a net loss of $3.4 million. Its numbers haven't improved much in fiscal 2006, with the company recording losses in the first and second quarter, and a slight gain of $0.2 million in the third.


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In November, Strategic announced its board of directors had received a letter from the board's Chairman William R. Berkley, ...

MSC Industrial Direct Inc., Melville, NY, distributor of MRO supplies to industrial customers, reported sales of $402 million for the first quarter 2007, an increase of 35.9% from the same period in fiscal 2006. Profit increased 26.2% to $40.3 million from the year-ago period.


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J & L Industrial Supply, purchased from Kennametal last year, accounted for two-thirds of the growth. CEO David Sandler said the integration of J & L is going as planned, and that MSC should be able to generate the forecasted $20 million in margin improvements and cost savings that was originally anticipated.


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A conference call regarding the first quarter results and current operations is available at&nbsp ; <A href=http://www.mscdirect.com/" target=_blank ...

Prices for manufactured goods in Canada remained unchanged for a second consecutive month in November, while prices for raw materials increased after three months of significant declines.


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Prices charged by manufacturers, as measured by the Industrial Product Price Index (IPPI), were unchanged from October to November, as downward pressure from declining petroleum prices eased. Lower prices for primary metal products and petroleum products were offset by higher prices for chemical products, fruit, vegetables and feed products and pulp and paper products.


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The 12-month change in the IPPI was up&nbsp ; 1.9%, a higher rate of growth compared to the year-over-year increase of&nbsp ; 1.2% in October. Upward pressure came mainly from higher ...
Ellison Technologies, Inc., Cleveland, OH, provider of engineered systems and industrial equipment to metal-working and metal-cutting manufacturers, has acquired Jackson Machinery Company, a privately held distributor based outside of Cleveland.The acquisition provides Ellison a stronger position in northern Ohio, a strong manufacturing base. The area includes major industrial markets such as Cleveland, Akron-Canton, Mansfield, Youngstown and Toledo. Industries represented include aerospace, automotive, agricultural, medical, and energy. Processes used include high-speed and multi-axis machining, robotic automation, continuous flow, and setup reduction. Until being acquired, Jackson Machinery was an exclusive dealer of Mori Seiki products and sub-dealer to Mori Mid-America Sales, ...

Construction spending during November 2006 was estimated at a seasonally adjusted annual rate of $1,184.1 billion, 0.2 percent below the revised October estimate of $1,186.7 billion. The November figure is 0.1 percent above the November 2005 estimate of $1,183.1 billion.


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During the first 11 months of this year, construction spending amounted to $1,110.5 billion, 5.4 percent above the $1,053.4 billion for the same period in 2005.


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Private Construction


Spending on private construction was at a seasonally adjusted annual rate of $905.8 billion, 0.6 percent below the revised October estimate of $911.0 billion. Residential construction was at a seasonally adjusted annual rate of $589.3 billion in November, 1.6 percent ...

Airgas, Inc., Radnor, PA, has acquired CFC Refimax, LLC, a full-service refrigerant supplier and reclamation company based in Atlanta, GA.&nbsp ; The business, which has about 50 employees, had about $21 million in annual sales in 2006.


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Refimax has been integrated into Airgas Specialty Products, national distributor of ammonia products and services, various process chemicals, and refrigerants. Airgas Specialty Products is part of the Gas Operations Division, which also includes Airgas Carbonic and Dry Ice, and Airgas Nitrous Oxide.&nbsp ;


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Refimax has operations in Atlanta and Houston, and five third-party distribution warehouse locations in York, PA; Reno, NV; Indianapolis, IN; New Orleans, LA; and Dallas, TX. ...

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