Industry Update: Distribution

By: John Bintz | PJ Patel | Charles Sapnas

VRC is proud to release its latest Industry Report, which includes a concise, insightful update on the Distribution industry including recent transactions, market multiples, company performance and purchase price allocation percentages.

Read the full report: Distribution: March 2019

March 2019 Industry Highlights

  • 2018 was a positive year for the distribution industry with many factors aiding the nearly $6.0 trillion segment. The outlook for 2019 is less certain as factors relating to trade and economic strength are likely to influence the operations of industry leaders. As companies continue to leverage technology, embrace expanding markets, enhance efficiencies and utilize analytics, the pace of M&A has been strong with a number of multi-billion dollar deals closing in 2018 and more likely to come as 2019 keeps pace.
  • One deal worth mentioning that closed in early 2019 is Univar’s $2.0 billion acquisition of Nexeo Solutions. The transaction will yield a premier global chemical and ingredients distributor with one of the largest North American presences. The purchase price, post synergies, will come in at around 6.5x LTM EBITDA.
  • Revenue growth has been under pressure as of late falling from above 3.0% to 1.5%, which is below our historical ranges. EBITDA margins have risen slightly in 2018 but remain at their recent levels of approximately 6.0%.

Past Industry Updates:

Distribution: July 2017