Specialty Distribution Industry Update Q2 2022
Read more about M&A trends and activity in this sector
Specialty Distribution Sector Update
Download PDFSpecialty Distribution Overview
Global specialty distribution industry participants include distributors and suppliers of various specialty products and parts covering a variety of end-markets. Key public industry players are categorized by sub-sectors as follows:
| Sub-Sector | Public Revenue / EBITDA Multiple(1) | Description | Key Select Industry Leadership | |
|---|---|---|---|---|
Automotive
| 2.18x / 12.4x | Omni-channel suppliers of aftermarket parts and accessories |
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|
| Building Products | 0.75x / 6.0x | Suppliers of products used in residential and commercial construction applications |
|
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Consumer Products
| 1.50x / 10.0x | Distributors of specialty residential products |
|
|
| Food Service | 0.43x / 11.9x | Suppliers of food and non-food products to restaurants, hospitals, and schools and universities |
|
|
Healthcare
| 0.56x / 10.2x | Providers of pharmaceuticals, medical supplies, equipment and devices |
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| Industrial | 1.31x / 11.6x | B2B distributors of products, equipment, and supplies to a range of industrial applications |
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Specialty Chemicals
| 2.23x / 11.4x | Suppliers of smaller volume chemical formulations used in specific applications |
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Sector Perspectives: Supply Chain Issues Affecting Specialty Distribution
- In September 2022, the ISM Manufacturing Supplier Deliveries Index stood at 52.4%, indicating delays and slowdowns in the supply chain, as a result of continued transportation delays and labor shortages
- This figure measures how quickly shipments are reaching customers. The higher the number, the slower the deliveries
- To mitigate the impact of supply chain disruption, distributors such as MRC Global, MSC Industrial, and other major industry players are building inventory buffers to cushion the impact of price increases, long lead times, and lack of product availability
- Further, many distributors have relied on technological initiatives to navigate through continued supply chain issues, by adopting systems for logistics planning, inventory management, and general automation
- Per Holden Lewis, CFO of Fastenal Company: “Our market place continues to experience tight supply chains and labor shortages. To address these, we will continue to lean on technology and branch initiatives to improve productivity and an organizational culture that empowers local leaders to sustain high service levels.”
- Supplier relationships have been a critical part of managing challenging supply chain dynamics, with companies maintaining constant communication and securing long term agreements, that foster deeper relations with suppliers to ensure timely deliveries and adequate supply
We hope you find this information valuable, and as always, feel free to reach out if you would like to discuss in further detail. To read the full report, download the PDF below.
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Specialty Distribution Sector Update
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