IDG buying spree begins with three purchases
By Staff -- Industrial Distribution, 3/1/1998
Atlanta, Ga.--Industrial Distribution Group, Inc. is set to acquire three distributors in its first acquisition since forming last year.IDG expects to pay $12.5 million for the three companies, which have combined revenues of $46 million. With the acquisitions, which are expected to be completed this month, IDG will grow to 12 members with more than $300 million in annual sales.
The companies are Continental-McLaughlin of Pico Rivera, Calif., a distributor of pneumatic power tools, hoists and related products with $21 million in annual revenues; E.C. Blackstone Co. of Memphis, Tenn., one of the mid-South region's largest high-speed steel and carbide cutting tool distributors with $18 million in revenues last year; and Northern Tool & Supply, Inc., a $7 million distributor of air and power tools in Michigan's upper peninsula.
The announcement on Feb. 18 follows IDG's initial public offering in September. Martin Pinson, chairman and chief executive officer of the company, says other acquisitions are expected to follow soon in Texas, southern California, Ohio and New England.
"We are being selective during this early stage to be sure that we find companies with the same applications expertise and value-added approach to the customer that are the defining aspects of our competitive strategy,'' he says.
"The impetus and opportunities for consolidation in the highly fragmented MROP business remain strong, and IDG is well positioned to continue to successfully implement its acquisition strategy," Pinson says.
Blackstone president Sam Mitchell says the move will benefit his 51-year-old company.
"I'm glad to be part of the first group, a first-round draft choice,'' he says. "We hope to be a major part of their plan in the South, we see it as nothing but a positive. We hope to draw on their resources and they (will) draw on our expertise.''
Mitchell anticipates that as a part of IDG, Blackstone will focus more on activity-based pricing, see different versions of integrated supply and join quality control programs. He also expects to take on new commodity products and have more access to capital. "They're going to be one of the players in the future and I'm glad they wanted to include me,'' he says.
IDG's goal is to create a $1 billion company with a presence in the top 50 or 75 industrial markets in the country.
Members of the group include Shearer Industrial Supply Co.; B&J Industrial Supply Co.; Tri-Star Industrial Supply, Inc.; Associated Suppliers, Inc.; J.J. Stangel Co.; Cramer Industrial Supplies, Inc.; Grinding Supplies Co.; Slater Industrial Supply, Inc. and Industrial Distribution Group, which operates Dixie Industrial and Boring & Smith.
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