2021 ended with an unprecedented volume of merger & acquisition announcements in or impacting the industrial supply sector, and 2022 opened with a near-identical flurry.
Despite all the ongoing supply chain and labor constraints, we at Industrial Distribution published 41 news items regarding M&A activity during January, covering announcements of completed or pending mergers, acquisitions and divestments impacting distributors relevant to the industrial products space in North America. That 41 figure was a new single-month record since I joined this publication in 2014, and likely is the best mark since the 2008-2009 Great Recession — and maybe ever.
RELATED: ID's 2021 M&A Recap: Breakneck December Closes Major Rebound Year - published Jan. 4
That figure includes 10 deals that were announced during December — nearly all in the second half — that didn't end up posted on ID until early January due to our offices being closed over the holiday stretch of Dec. 24-Jan. Still, even when subtracting those, the 31 deals we covered that were announced within January put it among the most active M&A months I've ever seen. December's 38 set a new record, besting September's 33. November likewise had a very active 28 M&A news announcements.
We posted a total of 234 M&A news announcements during 2021, a whopping 68 percent increase over a forgetful 2020 that was severely hamstrung by the COVID-19 pandemic that financially crippled many manufacturers — at least temporarily. Nearly half of 2021’s deals — 49.1 percent — occurred during the year’s final four months.
RELATED: Why Industrial Manufacturing M&A Volume Will Continue to Rise in 2022 - published Dec. 23, 2021
January M&A Recap
Here is all the M&A-related news we covered during January, listed in reverse chronological order of their announcement date, rather than their ID publication date. As always, a decent portion of these didn’t involve an industrial distributor or supplier, but all were worthy of news coverage due to how the companies involved impact this market.
- Wajax Acquires Fellow Ontario Distributor Process Flow Systems - announced Jan. 31
- A&M Industrial Boosts Northeast Footprint, Acquires State Industrial Supply - announced Jan. 26
- Fluid Power Manufacturer Industrial Flow Solutions Acquires Dreno Pompe - announced Jan. 26
- FleetPride Acquires Nationwide Truck Service - announced Jan. 25
- Pro Staff Sales Merges with Lawless East - announced Jan. 25
- AFC industries Continues Acquisition Tear, Adds Oregon Bolt - announced Jan. 23
- Epicor Acquires WMS Provider JMO Business Systems, Expanding in Automotive Aftermarket and OE Parts - announced Jan. 18
- AFC Industries Acquires Askew Industrial Corp.; 2nd Deal in a Month - announced Jan. 17
- ODP Corp. Delays Separation to Evaluate Suitors for Consumer Business - announced Jan. 14
- B2B Industrial Packaging Makes Acquisition in Phoenix - announced Jan. 14
- Stellar Industrial Acquires Nevada's JLM Industrial Supply - announced Jan. 13
- BlackHawk Industrial Acquires Pinnacle Tool & Supply in Ohio - announced Jan. 12
- HVAC & Plumbing Distributor Marcone Acquires Munch's Supply, Professional Plumbing Group - announced Jan. 11
- NEFCO Acquires Fellow Construction Supplies Distributor Russell Supply - announced Jan. 10
- Cablevey Conveyors Privately Acquired - announced Jan. 10
- Sun Chemical Acquires SAPICI, Expanding in Polymers and Lamination Adhesives - announced Jan. 10
- CECO Environmental to Acquire Industrial Flow Control Supplier GRC - announced Jan. 10
- Holland Pump Acquires Pump Service & Supply in New York - announced Jan. 7
- JGB Enterprises Acquires All-Serv Industrial in Louisiana - announced Jan. 7
- Hopkins Manufacturing Acquires Grease Guns Maker Lumax - announced Jan. 6
- FloWorks Acquires Fluid Handling Distributor SemiTorr in Oregon - announced Jan. 6
- Hy-Tek Holdings Acquires Advanced Handling Systems - announced Jan. 5
- Novvia Group Acquires Fellow Packaging Distributor Rhino Container - announced Jan. 5
- Harbour Group's Stainless Hose Fittings Acquires OmegaOne - announced Jan. 5
- Eaton Acquires Royal Power Solutions for $600M - announced Jan. 5
- PE Firm Acquires 3 Companies to Form Precision Tooling & Components Supplier, The Producto Group - announced Jan. 4
- Walter Surface Technologies Acquires Safety & PPE Supplier Allegro Industries - announced Jan. 4
- Motion Completes $1.3B Acquisition of Kaman Distribution - announced Jan. 4
- Belt Power Expands in Midwest, Acquires Accurate Industrial Products - announced Jan. 3
- PE Firm Closes on Acquisition of Pelican Products - announced Jan. 3
- Monroe Engineering Acquires Integro, Growing in Cable Assembly and Power Distribution - announced Jan. 1
- SBP's Singer Equities Acquires OB&E Rubber in Indiana - announced Dec. 31, published on ID Jan. 4
- Allied Motion Acquires Spectrum Controls for $70M - announced Dec. 31, published on ID Jan. 3
- Simpson Manufacturing Offers to Buy Europe's Etanco Group for $818M - announced Dec. 29, published on ID Jan. 3
- Lawson Products to Merge with TestEquity, Gexpro Services - announced Dec. 29, published on ID Jan. 3
- RelaDyne Sold to Different PE Firm - announced Dec. 23, published on ID Jan. 3
- Motion & Control Enterprises Acquires Robotics & Motion Control Distributor RSA - announced Dec. 21, published on ID Jan. 5
- Imperial Dade Acquires Garrett Paper in St. Louis - announced Dec. 20, published on ID Jan. 3
- SupplyOne Acquires Fellow Packaging Distributor Romanow Container - announced Dec. 20, published on ID Jan. 3
- White Cap Acquires Diamond Tool, Names New CFO - announced Dec. 16, published on ID Jan. 3
- Precision Components Maker MW Industries Acquires Ideal Fasteners - announced Dec. 10, published on ID Jan. 3
What’s Fueling It?
There’s surely a number of factors behind this. Primarily, the industrial economy is significantly improved since late 2020. The Institute for Supply Management’s Manufacturing Purchasing Managers Index held in solid expansion territory all of 2021. Baker Hughes’ North America active rig count on Jan. 28 was up 48.2 percent from a year earlier. Perhaps as well, growth-hungry industrial distributors and suppliers are looking to gain as much market share they can ahead of funds rolling out from the Biden administration's $1.2 trillion infrastructure deal that was signed into law on Nov. 15.
And, perhaps most importantly, there have been no major COVID-caused factory shutdowns since late 2020 (*knocks on wood).
This isn’t to say distributors and suppliers have it smooth-sailing right now. Not at all. This market is still dealing with a considerable labor shortage — especially in warehouses and on plant floors; backlogs at ports that are gradually easing but still historically high; and persistent shortages of various materials that are fueling inflated prices that are looking more and more permanent. Still, business conditions began 2022 very favorable from a demand standpoint.
2020 was a very hard year financially for many small- and mid-sized industrial distributors and suppliers that don’t have the credit facilities and investor-backing of their publicly-traded counterparts that dominate the top half of ID’s Big 50 List.
With that, 2020 likely left a number of small companies looking for a buyer just so they could stay in business — even if that meant no longer being independently-owned and operated. This left larger distributors and private equity firms with plenty of options to gain market share with as the market began and continued to recover throughout 2021 and into this year.
On Our/Your Radar
Of course, the figures mentioned in this column don’t encapsulate EVERY deal made in the industrial supply sector. There are always going to be deals made that weren’t on our radar — especially among small, independent firms. But our website and daily e-newsletter is going to be your best way of keeping up with the rapid pace of bolt-ons happening in this market.
So, when will this breakneck pace of M&A slow down? There’s surely no way it can keep going at this rate throughout 2022. But as long as the industrial economy keeps churning with solid expansion, I would expect February and March to remain very busy.
As for December, the holidays naturally make it one of the slowest M&A months of the year, so I'm expecting this month's deals count to be considerably lower than November's, but the first half of the month figures to still be pretty active. I'm expecting January to be a much stronger month.
See our full-year 2021 and December M&A recap here
See our November M&A recap here
See our October M&A recap here
If your company has news to share, M&A or otherwise, contact me at at [email protected].
As always, the best way to stay on top of industrial supply M&A news is to make sure you're subscribed to ID's free daily e-newsletter.
