In a move to grow stronger in the manufacturing arena and
boast metalworking experts,
W.W. Grainger, Inc.
) acquired Mich-based E&R Industrial Sales, Inc. The latter
is a distributor of metalworking, production supplies and MRO
materials to manufacturers and industrial customers across the
Midwest and Eastern United States. The deal will be accretive to
earnings starting 2014.
E&R Industrial offers more than 100,000 products catering
to 4,000 customers across the aerospace, automotive and general
industrial sectors. It has a workforce of more than 350,
which includes metalworking specialists in field sales, inside
sales and product management. In 2012, E&R Industrial
generated sales of approximately $180 million.
The acquisition, effective immediately, will extend Grainger's
capabilities in serving customers in the manufacturing space.
E&R Industrial's technical expertise and strong metalworking
capabilities, along with Grainger's supply chain excellence,
broad product offering, and inventory management acumen will
enable customers save time and money by consolidating their MRO
purchases with Grainger.
Grainger, which belongs to the industrial services industry
HD Supply Holdings, Inc.
MSC Industrial Direct Co. Inc.
), reported second-quarter 2013 earnings of $3.03 per share, up
15% from $2.63 a year ago and ahead of the Zacks Consensus
Estimate of $2.96. Revenues in the quarter were $2,381 million,
up 6% from $2,249 million in the year-ago period, but below the
Zacks Consensus Estimate of $2,392 million. However, Grainger
reported a 4% year-over-year increase in sales in Jul 2013,
narrower than 5% increase in June and 11% growth in Jul 2012.
Grainger will continue to benefit from its focus on expanding
its sales force, product offerings and strengthening its
businesses across all operating regions, mainly in Asia and Latin
America, as well as continued investment in e-commerce - its most
However, the recent slowdown in sales is a concern. Grainger
plans to spend $150 million for growth initiatives in 2013. Even
though these initiatives will lead to additional share gains in
the future, it will weigh on margins in the short term.
Lake Forest, Ill.-based Grainger is a leading North American
distributor of material handling equipment, safety and security
supplies, lighting and electrical products, power and hand tools,
pumps and plumbing supplies, cleaning and maintenance supplies,
forestry and agriculture equipment, building and home inspection
supplies, vehicle and fleet components, and various aftermarket
Grainger currently retains a short-term Zacks Rank #3
GRAINGER W W (GWW): Free Stock Analysis
HD SUPPLY HLDGS (HDS): Free Stock Analysis
MSC INDL DIRECT (MSM): Free Stock Analysis
SCANSOURCE INC (SCSC): Free Stock Analysis
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