Pinson resigns; IDG begins search for CEO
Marty Pinson oversaw 18 acquisitions at IDG in 1998.
By Staff -- Industrial Distribution, 4/1/1999
Atlanta--Apparently frustrated at the slower than expected pace of acquisitions, Marty Pinson announced his resignation from Industrial Distribution Group on March 9.Only eight months after the firm removed Doug Smith as its president, IDG now faces another management challenge in replacing Pinson, who said his departure was amicable, but that "philosophical differences" led to his resignation.
The firm has named Richard M. Seigal, who has been a director in the company since 1997, as chairman of the board and acting chief executive officer and president. Seigal, a former executive at SYSCO Corp., which did a similar rollup in the food business, will also head up the search committee to fill the CEO/president post. He was not immediately available for comment, but chief financial officer Jack Healey says the firm has not set a deadline for having a new leader in place, and will hire a recruitment agency to assist in the process.
Pinson, who will pursue an opportunity in private venture capital, didn't elaborate on the personnel change, except to say that "there are philosophical differences between us. I think the world of those guys and what they are doing. At some point it will be appropriate [to comment]. There are lessons to be learned here, but I'd prefer to wait [until the time is right.]"
Industry analysts believe the move was the result of frustration on Pinson's part that he was unable to acquire firms as quickly as he did in the office products sector, where consolidation was more rampant and readily accepted.
"I'm not overly surprised [by his departure]," said one analyst who follows IDG closely. "I think the company needs to move faster to execute its strategy in terms of consolidating the industry and getting the benefits of size. I think the change is positive.
"The whole consolidation strategy is a new concept to [industrial distributors], as opposed to office products, where it's been going on longer and most of the industry understood it. It seems that in industrial distribution there's more of an education process involved."
"This guy is a player," said another analyst. "It was becoming apparent that they weren't working and playing well together."
IDG also announced that 1998 sales increased 31.7 percent, to $437.6 million. The firm said that same store sales increased less than one percent in the fourth quarter, due to challenging economic conditions within the industry.
"The slowdown in the MROP market continues to add pressure on us to further consolidate our operations in order to protect profitability," said Healey in a release. "We remain encouraged, however, because the consolidation activities undertaken to date appear to be yielding benefits."
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