Post COVID-19 recovery forming in M&A
SPOT ON | DISTRIBUTION | FEBRUARY 2021
A significant jump in distribution’s total M&A transaction value last year confirms the global market shows signs of life again, despite the cautious approach taken by companies at the onset of the pandemic when deal volume initially dropped. Oaklins’ distribution sector specialist Don Wiggins reports on noteworthy transactions and valuation trends, providing an overview of the sector’s four subgroups: healthcare, industrial & capital goods, consumer goods and food & beverage.
Mixed M&A activity in 2020 saw the total number of deals decrease by 21%, while the total annual deal transaction value increased by 74% — implying an increase in average deal size. Deal volume dropped significantly in the first three quarters, as companies adopted a wait-and-see approach to M&A during COVID-19. But global M&A markets for distribution began to show signs of life again in Q4 2020.
Several large, noteworthy transactions in 2020 included The Home Depot’s acquisition of HD Supply, Apollo’s acquisition of technology distributor Tech Data and WESCO International’s acquisition of Anixter International. These three deals alone represented US$22.5 billion in transaction value.
We spotlight Henry Schein, the world’s largest provider of healthcare products and services to dental, animal, health and medical practitioners. Comparing the global distributor’s post-COVID-19 strategy with its M&A activity when we first profiled the company in 2018, we take a look at the trends the organization views as positively affecting its market.
"Our strategy is focused on delivering solutions that enable our customers to provide the best-quality patient care while optimizing the efficiency of their practice." - Henry Schein
This edition’s case study features the acquisition of Maner Builders Supply Company, a distributor and installer of construction materials with locations in the southeast of the United States, by US LBM, one of the largest building products distributors in the United States, and STORE Capital, a provider of real estate investment trust services.
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