Acquisitions, expansions alter distribution landscape
By Ken Ryan—TThe face of floor distribution is now changing as large cash distributors expand their territory, either through acquisitions or by adopting new lines. Meanwhile, smaller wholesalers – some of which are aging or lack the financial means to continue their operations – are looking to sell.
At the same time, as more private equity flows into the company, the pace of mergers and acquisitions is likely to accelerate, executives say.
Below is a sampling of the movements that have taken place during the COVID-19 pandemic:
- Between August and September, Galleher acquired West Valley Hardwood Floor Distributors, a wholesaler of hardwood flooring and installation supplies in Washington and Oregon; and Trinity Hardwood Distributors, a dominant Texas hardwood player. Trinity Hardwood is expected to play a strategic role for Galleher as the Santa Fe Springs, California-based distributor continues to expand its presence in the US by acquiring West Valley Hardwood in Washington State , Galleher has now expanded to six western states.
- ACF Distributors and All Floor Supply have acquired Gardner Industries, a full-service wholesaler of flooring in the New York/New Jersey market. The merger agreement integrates the three distributors into one unified company: ACF-Gardner, which will operate 85,000 square feet of warehouse space in New York, New Jersey and Florida.
- WILsquare Capital, a St. Louis-based private equity firm, acquired Tri-State Wholesale Flooring, LLC, a flooring products distributor based in Sioux Falls, SD Tri-State was then merged into Crown Products Inc., a WILsquare portfolio company.
- Xpress Global Systems (XGS), through its private investment firm Aterian, has acquired Delta Distribution/Michigan Carpet, a specialty LTL company, as well as 7 Hills Transportation, an asset-based carrier headquartered in Cartersville, Georgia.
- BR Funsten and Tom Duffy Company unveiled a brand consolidation to unite the companies under Tom Duffy Company. “It enables us to sharpen our operational, warehousing and trucking efficiencies, helps accelerate our digital transformation plans, and promises a collaborative corporate culture,” said Anne Funsten, president.
- Galleher acquired Sunwood Distribution, a distributor in the Salt Lake City area serving the Utah and Idaho markets with hard floors and installation supplies. The acquisition provided the opportunity to combine Sunwood’s local service and relationships with Galleher’s extensive product, inventory and sourcing capabilities.
- Tri West Ltd. took over the distribution rights for Armstrong Flooring’s products in Northern California and Nevada. Tri-West had served as Armstrong’s distributor in Southern California and the Las Vegas area; with this change, they now serve all of California and Nevada in addition to Arizona, New Mexico, Utah and Hawaii.
- EJ Welch Company burst into FCNews‘ top 20 distributor list based on the acquisitions of T&L Distributing and Gilford-Johnson Flooring. Both distributors were top 20 members at one point. Before that, in 2019, EJ Welch was acquired by the private equity group Center Rock Capital Partners, which paved the way for the acquisitions a year later. As Welch CEO, Mitch Jolley, noted, “With Center Rock as our partner, we are eager to pursue further growth through organic initiatives and acquisitions.”
- It’s not just distributors taking action. In its effort to expand beyond the West Coast, supplier Republic Floor bought properties and turned them into distribution centers, and also acquired Hughes Western, a Salt Lake City wholesaler. The purchase expanded Republic coverage to Utah, Wyoming, and Montana; part of their drive to go nationwide.