This month we’ve seen an acceleration in the acquisition game for distributorwww.codale.coms and manufacturers. Consider on the distribution front:
- Kaman buys Zeller (which we commented on)
- Crescent buys McCullough in Pittsburgh (a Schneider Electric automation house, giving Crescent 2 locations in the area)
- Sonepar buys Codale (another Rockwell distributor for Sonepar)
- Standard buys Wittock Supply (and has now launched a plumbing, heating and cooling supply division with some of the locations also carrying electrical material)
- PEPCO, in Cleveland, acquired assets of Edison Equipment (2 locations in the Columbus area)
- USESI, a sister company of CED, acquired Warren Electric in NY
And on the manufacturer side:
- Leviton purchased HAI
- Panduit acquired Unite Technologies (a UK company that specializes in energy management, power, security and environmental monitoring solutions for the enterprise and data centers.
- Eaton acquired a Chilean manufacturer of power assemblies
So, what does all of this mean …
There is plenty of money available for acquisitions to be made, whether it be borrowed money (at cheap rates) or cash that companies have access to. While many in the industry are experiencing a slowdown, those who are looking towards tomorrow see opportunities to expand their reach.
And for those who are concerned about the slowdown, don’t have strong (or any) succession plans or are concerned about the “fiscal cliff” and the potential for increased capital gains, the time clock is ticking down if you want to sell this year (and perhaps beat the taxman out of some money). From talking with a number of acquirers, if you are interested in selling and currently are not in the discussion phase, time could get short depending upon the number of ownership decision makers there are in your company as well as time to conduct due diligence (which can be dependent upon deal terms as well as the breadth of assets that you have in the business – equipment, branches – and the quality of your inventory). Additionally, some of the acquirers have told us that they strongly prefer if some, or all, of the key personnel stay with the business (after all, they can acquire buildings and procure inventory … they need quality people).
Six distributors being purchased in one month, which is considered a vacation month, is significant. We don’t expect it to be the end as we’ve heard of others that are “in discussion.”
How many more distributors do you think will be sold this year?
1 Comment
August 29, 2012 at 2:13 pm
didn’t realize so many distributor deals this month.
as to how many more this year, I’d say another 10-15 distributors will sell
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