Cameron & Barkley hits acquisition trail
Jim Zechmann's Warner Industrial: Just the beginning for Cameron & Barkley?
By Staff -- Industrial Distribution, 2/1/1999
Newton, Mass.--It looks like 1999 is going to be another big year on the acquisition scene, and a relatively new player in the buyout market --Charleston, S.C.-based Cameron & Barkley --intends on being a major player. The firm announced it was acquiring Minneapolis, Minn.-based Warner Industrial on Dec. 26, and followed that purchase with the buyout of well-known Don E. Williams Co. (deWco) on Jan. 8.According to Cameron & Barkley executive vice president Joel Bateman, it's all part of a drive to capitalize on the consolidation trend and establish a national presence in the integrated supply arena. The two additions add nearly $85 million in revenue for Cambar, which had 1997 sales of $590 million.
"The industrial distribution industry is obviously facing lots of consolidation now, and we want to be a player in that," says Bateman. "We don't want to be on the sidelines. One of our major goals is to expand considerably geographically, and Warner gives us a piece of geography that we are not in right now, with virtually no overlap."
The Warner Industrial deal is expected to close by March 15. The purchase price for the cash deal was not announced. Warner was ranked No. 90 in Industrial Distribution's 1998 Top 100 with revenues of $42.7 million. The Don E. Williams transaction is expected to close by March 31. That firm had $42 million in revenue in 1998.
Warner president Jim Zechmann says his firm had been courted recently by Industrial Distribution Group, Industrial Distribution Partners and others, and accelerated its talks with Cambar at the ASMMA/I.D.A. fall meeting in Chicago. Zechmann says he partnered with Cameron & Barkley because both firms have similar business values.
IDG has also announced the purchase of two more firms --The Innovative Distributor Group and R.F. Ker Co., Inc. IDG expects the two acquisitions to add approximately $52 million to its revenue base. Meanwhile, IDP is expected to announce its first acquisition sometime this month, according to sources close to the firm.
Cameron & Barkley is an employee-owned firm, and Warner Industrial operated on a 25-percent ESOP plan, says Zechmann. In addition, both firms are over 100 years old, and both are heavily targeting the integrated supply marketplace. Zechmann expects his firm to retain the Warner Industrial name for the immediate future, since Cameron & Barkley has limited name recognition in that region. He expects the Warner division to eventually grow sales to $100 million.
"They have the same business philosophy, where they are 100 percent ESOP and we were 33 percent, so we were closely aligned that way," says Zechmann. "We know they want to be nationwide by 2000 and be a billion dollar corporation, and we think that's close to the number you need to be to survive maybe three or four years from now."
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