increased and increasing regulation. All told, I’d argue that the
handful of market factors discussed here, though largely theoretical, will lead to companies continuing to explore acquisition
opportunities in earnest in 2015.
To be fair, not every indicator, whether practical or theoretical,
points to continued steady M&A activity. Valuations can always
stand in the way of deals getting done. When there is a lot of capital sitting on the sidelines, that money begins to get spent with
increasing velocity, eventually leading to overly robust valuations.
I don’t necessarily see that happening in 2015, but it will happen
at some point, and M&A activity will slow correspondingly when it
The industrial distribution sector has always been highly frag-
mented and it remains so, despite recent activity (one need only
view Industrial Distribution's 2014 Big 50 Video Countdown to
gain an appreciation for recent M&A activity in the sector). With
that fragmented landscape, along with conditions that facilitate
M&A activity and market factors that can be readily addressed
through M&A, it seems likely that companies of all sizes in indus-
trial distribution will continue to respond to their environment
proactively, despite any possible valuation challenges. That is,
companies in this space understand that growth is imperative, and
that M&A, particularly in this environment, is an advantageous
means to that end.
Will Burnett is Managing Director of Austin, TX-based private
investment firm Owner Resource Group, LLC. If you would like to
know more about how ORG makes investments that enable business owners and management teams to pursue their objectives
and accelerate growth, contact Will at email@example.com.