In the report, BGL examines the current state of the industrial distribution M&A market as well as the overall market and near-term outlook. Distributors are navigating a choppy environment. Supply chains and sourcing remain impacted yet have improved, and inflation and pricing are top concerns. Labor constraints, which have spurred automation and efficiency, are easing. Distributors that have exhibited resilience are benefiting from portfolio and balance sheet strength to weather any volatility.
Brisk deal flow is indicative of broad investor interest across distribution subsectors and active participation from strategic and financial buyers.
- Strategic buyers cite active pipelines and are actively pursuing M&A to diversify portfolios and expand product, customer, and geographic markets. Motion Industries (Kaman Distribution Group) and Rexel (Mayer Electric) and are among the strategic buyers to recently announce large transactions.
- Nautic Partners’ acquisition of Vallen Distribution was a headliner in private equity transaction activity, illustrative of continuing interest in deploying dry powder into well-run distribution businesses as growth platforms.
- Serial acquirers are continuing their buying sprees, with Core & Main, Winsupply, Ferguson, and SRS Distribution among the buyers aggressively seeking acquisitive growth.
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