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| PVF e-news, September 5, 2007 |
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 The Unasked Question
Home Depot's unloading of HD Supply
has become quite a saga in the business news headlines of late. As you've probably heard, last week the home improvement giant had to lower its selling price by almost $2 billion to the three private equity buyers in a deal that hit a snag because of troubled credit markets. Under the new terms, Home Depot receives only $8.5 billion rather than the $10.3 billion originally negotiated for its distribution business. That's little more than it paid to acquire all the distribution firms that ended up as HD Supply. Home Depot also will end up retaining a 12.5% stake in a business that it really doesn't want to own.
While reports in the general business media focused on the credit crunch, housing slump and potential impact on Home Depot's business fortunes, nobody is asking an existential question that gets to the heart of HD Supply.
What is the point of operating a distribution company encompassing so many commodity areas?
Home Depot viewed it as a strategy to entice professional trade business, but they took on a lot of extraneous customers along the way via industrial PVF and other non-residential segments. HD Supply bills its Industrial PVF Group as "one of the nation's largest specialty distributors," and also boasts sizable
waterworks and utilities divisions -- mostly inherited with the Hughes Supply purchase.
What synergies do those businesses have with plumbing, HVAC, electrical, fasteners, interiors and the rest of the mish-mash of construction supplies that was acquired under former CEO Bob Nardelli's vision of diversifying into multi-line distribution?
It seems to this observer that the whole is worth less than the sum of its parts. We predict that sooner or later the new owners will try to recoup their investment by selling off HD Supply's component commodity groups to other buyers able to make more sense of them. It will be a tiny wave of de-consolidation moving against the predominant industry trend. |
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ASA Appoints New Executive VP
 Michael Adelizzi has been named executive vice president of the
American Supply Association
, effective September 4. This brings to conclusion a process that was begun almost eight months ago, after Inge Calderon, ASA’s executive vice president since 1995, decided to step down as the chief of staff in favor of taking on a new role with the growing Education Foundation. Chosen from a field of more than 75 applicants, Adelizzi is a career association professional who most recently served as executive director/CEO of the
Mason Contractors Association of America, where he spent the past 16 years building the association’s size, scope and influence in that industry. Adelizzi also has worked with the Illinois Chapter of the Associated Builders and Contractors, and served
as district representative for the office of U.S. Rep. Philip Crane. He is also active in his local community, current serving as the Schaumburg (Illinois) Township Republican Chairman.
Bonney Forge To Expand Facilities
Bonney Forge Corp. has completed the purchase of several acres of property adjoining the existing WFI facility in Houston that will more than double current manufacturing floor space.
The company intends the expansion to accommodate future growth of the traditional outlet fitting line as well as its WFI engineered-to-order business.
EMS Group Acquires Pipeline Unit
EMS Acquisition Canada, Inc, a wholly owned subsidiary of Energy Maintenance Service Group
(EMS Group), and BlackWatch Energy Services Trust signed a binding agreement on August 23, 2007 for the acquisition of the assets and business of BlackWatch’s pipeline construction division (formerly K&D Oilfield Services). The division provides pipeline and facility construction management, well-site construction, inspection services, equipment installation, and shop and field fabrication to oil and gas producers and pipeline owner / operators.
Plymouth Tube Acquires Trent Tube
Plymouth Tube Co.
announced that an agreement has been achieved for the acquisition of Trent Tube from Crucible Materials Corp. The purchase includes the Trentweld Plant (East Troy, WI) and the Trent Processing Plant (Chicago). Trent Tube’s Trentweld Plant produces 1/8" to 4" diameter welded and welded and drawn stainless steel tubing, including nickel and high alloys for a variety of applications. Primary products include mechanical, air cylinder, electropolished tubing, and specialty tubing products such as tubing for aircraft, sanitary, pharmaceutical, high purity and nuclear applications.
Bill Maron Joins Merit Brass
Bill Maron has been hired by Merit Brass to assume the role of southeast regional manager. He will be responsible for a five-state territory .
Lasco Fittings Appoints Two Regional Sales Reps
LASCO Fittings
hired Ron Modugno as its western regional sales manager and Sherman Dobbs as the north Texas sales direct representative. Modugno spent 15 years at KBI Inc, during which time he served as vice president – sales & marketing. At LASCO he will direct the sales and marketing of the company’s products in the western United States, western Canada and Mexico. Dobbs, a U.S. Navy veteran, has extensive management experience relative to the sale and marketing of HVAC and refrigerators.
Former President Bill Clinton To Keynote Greenbuild
Former President Bill Clinton will deliver the keynote address on opening day of the U.S. Green Building Council’s
Greenbuild Conference and Exposition, Nov. 7-9, in Chicago. Clinton’s speech will kick off what the USGBC expects to be the largest Greenbuild ever. More than 20,000 people from all over the world are expected to take part in the three-day event. Greenbuild’s exhibit hall sold out nearly a year in advance with 800 booths.
U.S. Steel Announces New OCTG Authorized Distributors
United States Steel Corp.
announced its new distribution network for oil country tubular goods (OCTG) sales in the U.S. resulting from its acquisition of Lone Star Technologies, Inc. and its related companies on June 14. The following companies have been named to the list of authorized OCTG distributors: Cinco Pipe & Supply, Energy Tubulars, J.D. Rush Co./ J.D. Rush Corp., Pipeco Services, Premier Pipe, Red Man Pipe & Supply, Republic Supply International / Alexander Steel Sales, Sooner Pipe, Toolpushers Supply. According to Joe Alvarado, U.S. Steel's vice president-Tubular, “U.S. Steel is now the largest supplier of OCTG in the United States, and we are committed to marketing our products in North
America through a selective, authorized distribution network.” These distributors will also be responsible for selling both seamless and electric resistance welded (ERW) tubular goods into OCTG markets. |
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 New PVF Email Address
In an effort to optimize and safeguard our email communications, PVF e-News will soon introduce a new email address for our eNewsletters. To help ensure you continue receiving our emails, please add the domain email-bnpmedia.com to your email address book or safe senders lists.
Follow this link for instructions. |
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10 Reasons Why Pipeline Accidents Are On The Rise
This according to an internationally renowned pipeline expert. Read more. |
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 This June 2003 cover story
in Supply House Times told of some simple yet ingenious economies that enabled a small PVF distributor, Collins Pipe & Supply, to cut out a bunch of fat without hitting bone. Topping the list was some $100,000 in savings from switching to outside carriers to deliver small orders. It's worth a read or re-read. (You may need to register to access the magazine archives, but it takes only a few seconds.)
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 Take a moment to appreciate our industry's cutting-edge involvement in the development of biodiesel fuel, the fastest growing alterantive fuel in the world. For instance, this pipefitter with the Chicago area mechanical contractor
Edwards Engineering is prefabbing some of the elaborate piping that will go into the $68 million Nova Biosource plant in Seneca, IL.
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