Recapping 2017's Q2 Mergers & Acquisitions

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As the calendar turns from June to July, it’s hard to believe we’re already at the halfway point of 2017.

For the industrial supply market, it’s been a healthy advance. The Industrial Supply Association’s monthly Economic Indicator Report — regarded industry-wide as a good barometer of the health of the industrial supply sector — showed that its Distributors Index bottomed out at 44.9 back in July of 2016, but hasn’t had a reading below 53.5 in any month since and has had a reading of at least 63.0 five times in the 10 months since that low-point. That index’s most recent reading showed a mark of 70.3 — its highest since February 2016. Anything above 50 indicates market expansion.

A healthy industrial distribution economy generally leads to increased merger & acquisition activity. Assuming the economy continues to grow in the second half of 2017, or at least holds steady, we will likely see plenty more consolidation across the market.

Below is a chronological recap of M&A activity that occured in the second quarter of 2017 (April-June). Of course, this doesn’t cover every deal that’s happened, as not every distributor acquisition is made public. I’ve also included divestments in this list.

April

SouthernCarlson Acquires Fastening Distributor River City Building Supply: Fastening and packaging distributor SouthernCarlson has announced the addition of Sacramento, CA-based River City Building Supply, Inc. The acquisition was finalized on March 31, expanding the organization’s Northern California footprint and service capabilities.

Flowserve Selling Gestra AG Unit For $198 Million: Flowserve Corporation, a provider of flow control products and services for the global infrastructure markets, announced Monday it has entered into a conditional sale and purchase agreement to sell its Gestra AG business unit to Spirax-Sarco Engineering plc, a provider of steam system solutions, for an Enterprise Value of $198.4 million. In addition to the product’s core manufacturing facilities in Bremen, Germany, the sale also includes several other smaller associated businesses supporting Gestra products.

ABB Acquires Factory Automation Provider B&R: Industrial robotics maker ABB has announced the acquisition of B&R, the largest independent provider focused on product- and software-based, open-architecture solutions for machine and factory automation worldwide.

GPC Subsidiary EIS Inc. Acquires Empire Wire & Supply: Genuine Parts Company subsidiary EIS — No. 22 on Industrial Distribution's Big 50 List — has acquired Rochester Hills, MI-based Empire Wire & Supply, a supplier of custom cable assemblies and a distributor of network, electrical, automation and safety products.

Winsupply Acquires Southern California Distributor Electrical Sales Inc.: Winsupply, No. 14 on Industrial Distribution's Big 50 List, has purchased Electrical Sales, Inc., a distributor of electrical materials serving Southern California from its headquarters in Vista, CA. Terms of the purchase were not disclosed.

Timken Broadens Couplings Line, Acquires Torsion Control Products: Timken has acquired Torsion Control Products, a manufacturer of engineered torsional couplings used in the construction, agriculture and mining industries.

Safety Container Supplier Justrite Mfg Acquires Italy's Sall SRL: Justrite, a supplier of products for the safe management of flammable liquids and other hazardous materials, has announced the acquisition of Italy-based Sall SRL, a designer and manufacturer of environmental protection, material handling and other workplace safety solutions.

Techniks Industries Acquires Tooling Division Of Parlec: Techniks Industries, a provider of tooling solutions for the metalworking and woodworking industries, has announced the acquisition of the tooling assets of Parlec, Inc., located in Rochester, NY.

Louisville-Based Material Handling Inc. Systems Privately Acquired: Material Handling Systems, Inc.: (MHS), a provider of advanced parcel sortation systems engineering and equipment, has announced that it has entered into an agreement to recapitalize in partnership with Thomas H. Lee Partners, L.P. (THL), making THL the majority owner of MHS. Founded in 1999 and owned by its employees, MHS has grown to become a leading provider of intelligent material handling systems to the top logistics and e-commerce companies in the world.

Purvis Industries Acquires Kinder Morgan Engineering & Conveying Unit: Effective April 19, Purvis Industries has acquired substantially all of the assets, brand rights, personnel and intellectual property of the Kinder Morgan Engineering and Conveying division of Kinder Morgan, Inc. Located in Houston, TX, Kinder Morgan Engineering and Conveying designs and fabricates some of the most innovative, comprehensive and responsive bulk material systems and solutions available.

Rhodius USA Acquires Rhodius-Branded Unit Of Sundisc Abrasives: Rhodius USA, the North American subsidiary of German industrial group Rhodius, announced April 22 that it has acquired the Rhodius-branded business of former exclusive importer Sundisc Abrasives, comprising the customer base, agent network and sales team.

LA-CO Industries To Acquire Industrial Marking Supplier J.P. Nissen: LA-CO Industries Inc, has agreed in principle to acquire the J.P. Nissen Company, a manufacturer of industrial marking products for the welding, fabrication and construction markets.

KMG Chemicals To Acquire Flowchem For $495 Million: KMG, a global provider of specialty chemicals, announced late Monday that it has signed a definitive agreement to acquire Flowchem, a manufacturer of pipeline performance products, from Arsenal Capital Partners, for $495 million.

Ohio Transmission Corp. Acquires Tri-Power MPT: Ohio Transmission Corporation, an industrial equipment distributor and service provider headquartered in Columbus, OH, has announced the acquisition of the assets of Tri-Power MPT, which has a single location headquartered in Akron, OH.Tri-Power MPT distributes automation, electrical, power transmission, motion control and safety products, primarily in the northern Ohio industrial markets.

Lincoln Electric Officially Acquiring Air Liquide Welding: Nearly two months after initially announcing they were in negotiation talks, Lincoln Electric and Air Liquide each announced Thursday that the companies have reached an agreement for Lincoln Electric to acquire subsidiary Air Liquide Welding for approximately $125 million.

May

Nemic Inc. Subsidiary JCT Industries Acquires 144-Year-Old Distributor Brammall Supply: Grand Rapids, MI-based Nemic Inc. has acquired Benton Harbor, MI-based Brammall Supply through Nemic's subsidiary, JCT Industries. Founded in Benton Harbor in 1873, Brammall Supply is one of the oldest industrial distributors in Michigan. The company has served a wide variety of industries over the years, concentrating most recently on cutting tools and abrasives for the metalworking industry.

Snap-on Acquires U.K.-Based Norbar Torque Tools: Tool-maker Snap-on announced Thursday announced that it has acquired Norbar Torque Tools Holdings Limited, along with its U.S. and Chinese joint ventures, for approximately $72 million.

Bosch Divesting Starters And Generators Unit To Two Chinese Firms: Zhengzhou Coal Mining Machinery Group, an industrial group that produces auto components and coal mining machinery, and China Renaissance Capital Investment, a private equity firm, have announced that relevant parties have entered into a binding agreement to acquire Robert Bosch GmbH's (Bosch) Starter and Generator business.

Motion Control Distributor Ritter Technology Acquires Fluid Systems Engineering: Ritter Technology, a provider and distributor of industrial motion and control products, announced that it has acquired the business of Fluid Systems Engineering, located in Clinton Township, MI. This most recent acquisition strengthens Ritter's commitment to providing engineered hydraulic and pneumatic products to its customer base in the greater Detroit area.

Timken Expands Industrial Clutches, Brakes Offering With PT Tech Acquisition: Based in Sharon Center, OH, PT Tech is a manufacturer of engineered clutches, brakes, hydraulic power take-off units and other torque management devices used in mining, aggregate, wood recycling and metals industries.

Pentair Splitting Into Standalone Electrical, Water Companies; CEO Stepping Down: Pentair’s board of directors has unanimously approved a plan to separate into two independent, publicly-traded companies — A global water company focused on smart, sustainable water and fluid processing applications; and a high-performance electrical company focused on improving utilization, lowering costs and maximizing customer uptime.

Fastener Distributor Endries To Be Privately Acquired From Ferguson: Nautic Partners has announce that it has entered into a definitive agreement to acquire, in partnership with management, Endries International, Inc. and certain Endries related affiliates from Ferguson Enterprises and its affiliates. Endries is a distributor of fasteners and Class-C parts serving industrial OEMs worldwide. From its headquarters in Brillion, WI and eight U.S. and international distribution centers, Endries provides over 500,000 SKUs to its customer base.

Lowe's To Acquire MRO Distributor Maintenance Supply Headquarters For $512 Million: Home improvement retailer Lowe's has announced an agreement to acquire Houston-based Maintenance Supply Headquarters, a distributor of MRO products to the multifamily housing industry, for $512 million. Maintenance Supply Headquarters has 13 distribution centers that serve customers in 29 geographic areas, mostly in the western, southeastern and south central U.S. The company's portfolio includes more than 5,300 different products and value-added services for maintaining and renovating multifamily properties.

B&D Industrial Acquires E-Tailer Industrial Control Direct: Further enhancing product offerings, B&D Industrial recently acquired the online business, Industrial Control Direct. Operating as an e-commerce enterprise, Industrial Control Direct (ICD) was founded in 2001 with the mission of providing IMO Automation products to the U.S. market. Today, Industrial Control Direct specializes in IMO Automation products while providing personal service and delivery throughout the globe via its online storefront.

June

Industrial gas makers Linde, Praxair announce merger deal:  Germany's Linde AG and U.S. rival Praxair Inc. say they have agreed on a deal to merge the two businesses, creating a global leader in the field of industrial gas with a market value of $70 billion. Linde said June 1 that the all-stock merger with Praxair, based in Danbury, CT, is expected to be completed in the second half of 2018, subject to regulatory approvals.

3M Selling Its Electronic Monitoring Business For $200 Million: 3M announced June 1 that it has entered into an agreement to sell its electronic monitoring business to an affiliate of Apax Partners, a global private equity advisory firm, for $200 million, subject to closing and other adjustments.

Klein Tools Acquires Pennsylvania-Based General Machine Products: Lincolnshire, IL-based professional grade tool manufacturer Klein Tools has acquired Trevose, PA-based General Machine Products Company, a supplier of specialty cable placement tools and equipment.

Mallory Safety And Supply Acquires Portland, OR Safety Distribution Business: Longview, WA-based Mallory Safety and Supply has acquired the safety distribution business of Portland, OR-based United Fire Health and Safety.

ERIKS NV To Divest German Plastic Parts Business: ERIKS — No. 16 on ID's Big 50 List — has signed an agreement with Röchling Engineering Plastics for the divestment of Fischer GmbH Kunststoff Präzision, based in Laupheim, Germany.

Tech Air Acquires Los Angeles Welding Distributor: Tech Air, a Connecticut-based distributor of industrial, medical, and specialty gases and related equipment and supplies, has completed the acquisition of Angelus Welding, Inc., a distributor of welding & industrial supplies and industrial gases located in Los Angeles, CA.

F.W. Webb Acquires New Jersey's Master Wholesale Supply: One week after announcing the opening of its new 90,000 square foot hub in Piscataway, NJ, F.W. Webb announced the acquisition of Vernon, NJ-based Master Wholesale Supply, which supplies plumbing, heating, HVAC/R and PVF products.

DDI System Acquires Fellow Distributor ERP Provider General Data Systems: Sandy Hook, CT-based DDI System has announced the acquisition of fellow ERP solutions provider General Data Systems, which serves the small- to mid-sized distributor software space.

Bunzl Acquires 3 Industrial/Safety Distributors In Canada & Spain: International distribution and outsourcing group Bunzl announced three acquisitions June 28, including three industrial and safety products distributors between Canada and Spain. Bunzl has acquired Canadian distributors AMFAS and Western Safety. Both are based in Vancouver and are distributors of commercial and industrial first aid and safety supplies, including a full range of PPE, to customers throughout western Canada. The two businesses have a combined annual revenue of $12.3 million (U.S.), and also provide safety-related services. Bunzl has also acquired Valencia, Spain-based Tecnopacking, a distributor of industrial and disposable packaging products to end users in Spain and Portugal.

Timken To Buy Dutch Lubrication Supplier Groeneveld For $280M: As Timken's fifth announced acquisition in the past 12 months, Netherlands-based Groenveld is a provider of automatic lubrication solutions used in on- and off-highway applications. Timken is purchasing the company for approximately $280 million.

Staples Agrees To Be Privately Acquired For $6.9 Billion: Staples and private equity firm Sycamore Partners announced June 28 that they have reached an agreement for Sycamore to acquire the office supplies retailer in a deal valued at approximately $6.9 billion.

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