Specialty Distribution Practice Overview

Introduction

Harris Williams is pleased to present our Specialty Distribution Industry Update for November 2020. This report provides commentary and analysis on current capital market trends and merger and acquisition dynamics within the global specialty distribution industry.

We hope you find this edition helpful, and we encourage you to contact us directly if you would like to discuss our perspective on current industry trends and M&A opportunities, or our relevant industry experience.

Our Practice

Harris Williams’ Specialty Distribution Group has experience advising companies that provide a range of specialty distribution services. 

This particular report focuses on trends and metrics in the following areas:

  • Automotive
  • Building Products
  • Consumer
  • Foodservice
  • Healthcare
  • Industrial
  • Specialty Chemicals
  • Technology

Recent HW Transaction

Harris Williams announced that it advised H.I.G. Capital’s investment affiliate, H.I.G. Advantage (H.I.G.), on its acquisition of Supply Source Enterprises, Inc. (SSE) from Genuine Parts Company (GPC). SSE is a leading manufacturer of branded and private label personal protective equipment and janitorial, safety, hygiene, and sanitation products. The transaction was led by Bob Baltimore and Graham Gillam of the Harris Williams Specialty Distribution Group.

Read the full press release here.

Representative Specialty Distribution Transactions

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What We’re Reading

Supply Chain Disruption and the Digital Response

Industrial Distribution  11/12/2020

The COVID-19 market is uncharted waters in the supply chain industry. Bottlenecks in the major manufacturing pathways, combined with safeguarded consumer spending and unprecedented restrictions on global trade, posed an early shock to the industrial and logistics sector. The ability to digitize consumer demand, and to pivot so quickly to a virtual economy, is single-handedly revivifying the need for supply chain manufacturing. But demand will not be the only thing digitized.

Read the full article here.

Key Topics with Industrial Distribution Leaders: The Distribution Center

Industrial Distribution  10/12/2020

Now 7+ months into it, the COVID-19 pandemic continues to force business leaders of all types to adjust to rapidly changing operational challenges and needs of customers. Here, distribution supply chain expert Helgi Thor Leja — who has helped clients such as MSC Industrial Supply, Thermo Fischer Scientific, Milwaukee Tool and others improve their supply chain operations – speaks with an executive at Valen about how the industrial distributor has adjusted its distribution center operations.

Read the full article here.

3 Distribution Sales Compensation Lessons from COVID-19

Modern Distribution Management  10/07/2020

COVID-19 has changed the way distributors think about sales models ― remote selling is now the norm, forecasting at the account level is a guessing game for some end-markets, and talent acquisition and development are complicated due to the dispersion of people.  No matter the organization or end-market, the disruption caused by COVID-19 highlights three key sales compensation elements that distributors should immediately address before launching 2021 plans.

Read the full article here.

The Great Pandemic Paradigm Shift

Modern Distribution Management  09/25/2020

New routines, structural changes, and a massive shift in consumer behavior are topics most of us have been reading about since the COVID-19 pandemic started spreading across the globe and throughout the U.S.

It’s no secret that the pandemic and resulting economic fallout have affected every business and industry in some manner, but I wanted to gain a better understanding of how the pandemic is impacting distributors. We recently surveyed our customers, asking about their overall business and staffing changes, what steps they’re taking to respond, and their outlooks for the future.

Read the full article here.

Retailers Push for Warehouse Robotics as Solution to e-Commerce Boom

Industrial Distribution  11/12/2020

The current pandemic has forced many industries to adapt to this new normal. Businesses are no longer looking for ways to just recover. Rather, they need to anticipate new needs and improve processes. Warehousing is one such industry, and its future is highly intertwined with advanced industrial robotics.

Read the full article here.

Public Markets1

Historical Stock Prices – Last 5 Years

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Historical Median TEV/LTM EBITDA Multiples – Last 5 Years

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Notes: Sub-sector indices weighted by stock price. Comparable company sets listed in sources.

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Note: Data presented as 11/10/20

Economic Trends

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Note: A Manufacturing Inventory Index figure greater than 50 indicates expansion;
A Backlog Index figure greater than 50 indicates expansion.

M&A Market Trends1,2,3

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1. S&P Global Capital IQ

2. Modern Distribution Management

3. Pitchbook

4. St. Louis Fed

5. Institute for Supply Management

 

Public Comparable Companies:

Automotive & Heavy Duty Aftermarket: AutoZone, O’Reilly Automotive, LKQ Corp., Genuine Parts Company, Dorman Products, Uni-Select

Building & Construction Products: CRH, Watsco, Beacon Roofing Supply, Builders FirstSource, Boise Cascade, GMS, BMC, Ferguson, Hardwoods

Consumer: Fortune Brands Home & Security, Pool Corp., SiteOne Landscape Supply, Central Garden & Pet Co., Colabor Group, AMCON Distributing

Industrial, MRO & Safety: L’Air Liquide, Fastenal, WW Grainger, HD Supply, MSC Industrial, Applied Industrial Tech, MRC Global, SPX Corp., NOW, DXP Enterprises

Healthcare: McKesson, Cardinal Health, AmerisourceBergen, Henry Schein, Patterson Companies, Owens & Minor

Specialty Chemicals: Brenntag, Univar, DKSH Holding, IMCD NV

Technology: Arrow Electronics, Rexel, SYNNEX Corp., Awnet, WESCO International, Anixter International, Tech Data Corp., ScanSource

Foodservice: Sysco, Performance Food Group, Bunzl, US Foods, United Natural Foods, Core-Mark Holdings, SpartanNash, Veritiv