HOUSTON — DXP Enterprises Inc. announced Tuesday that it has completed the acquisition of Pro-Seal Inc.
Founded in 1987, Pro-Seal is headquartered in Pontiac, Michigan, and operates two locations serving the Great Lakes region of the U.S. and all of Alaska.
Pro-Seal is a leading distributor of pumping systems, fluid sealing and related seal support systems and other industrial pumping equipment and services and lubricants. DXP funded the acquisition with cash from the balance sheet.
“We are pleased to announce the acquisition of Pro-Seal and welcome the employees of Pro-Seal to the DXP team," said David Little, chairman and chief executive officer of DXP. "With Pro-Seal, we continue to build on our strategy of providing a breadth of technical products and services on the regional and local level.
"With the closing of Pro-Seal, we have started fiscal 2024 with three acquisitions and each company provides DXP with exceptional management teams that enhance our ability to collaborate and serve our customers, vendors, and other stakeholders. These acquisitions are consistent with our growth strategy and demonstrate our commitment to expanding DXP as well as maintaining our leading position as the largest distributor of rotating equipment in North America."
The signing of the definitive agreement occurred on March 1. Sales and adjusted EBITDA for Pro-Seal for the last 12 months ending Dec. 31, 2023, were approximately $19.9 million and $1.5 million, respectively. Adjusted EBITDA was calculated as income before tax, plus interest, plus depreciation and amortization, plus non-recurring items.
"Pro-Seal will provide DXP with additional geographic territory and enhanced end market mix. Pro-Seal is a unique, well-run business focused on providing value-added service to its customers," Little added.
"Pro-Seal complements DXP’s end markets and provides entry into a geographic region we have not historically served as well as adding scale for us in Alaska," said DXP Chief Financial Officer Kent Yee. "Pro-Seal’s local market expertise combined with DXP’s size and scale will help us provide better customer solutions. We anticipate this acquisition to be accretive to earnings and further expand our Rotating Equipment division. This transaction will be positive for Pro-Seal and DXP’s customers, employees and shareholders."
