Industrial Distribution

Many MRO products distributors — especially large ones like those on Industrial Distribution’s Big 50 List — experienced a tough 2015-2016 period as weakened demand dragged on sales and profits.

Chicago-based Lawson Products wasn’t immune, as the company’s 2016 sales were largely flat and it took a modest loss. But starting in Q4 of that year, things turned around for Lawson and the industrial products economy as a whole. Lawson’s 2017 sales increased by 10. 6 percent, with healthy organic growth in each quarter.

But even during that rough patch, Lawson stayed aggressive in taking market share. The company made three acquisitions during 2016 — Mississauga, Ontario-based F.B. Feeney Hardware; Clinton, MI-based Perfect Products; and Vancouver, British Columbia-based Mattic Industries. Lawson followed those moves last fall with a return to Canada and the company’s largest acquisition ever: A CAD$43 million purchase of Calgary-based The Bolt Supply House.

Lawson Products president and CEO Michael DeCata, along with senior vice president of supply chain and business development Shane McCarthy, discussed Bolt Supply’s development and the company’s overall acquisition strategy in a recent exclusive interview with ID.

“We think each acquisition has given us some insight
into niche markets — increasing connection points with
customers,” said McCarthy. “We’ve remained committed
to an acquisition strategy. Even though four of our
acquisitions were in Canada, our focus is broad-based and
not Canada-only.”
Founded in 1948, The Bolt Supply House is a Canadian
distributor of fasteners, power tools and industrial
MRO supplies, with annual sales of approximately $34.4
million. Its 13 branch locations and 27 sales territory
managers serve companies and professional tradespeople
in Alberta, Saskatchewan and Manitoba. Bolt Supply
packages and ships products from a 43,000-square-foot
distribution center in Calgary.

The Bolt Supply addition was Lawson’s fifth bolt-on acquisition in a 24-month span, and more than doubles its sales in Canada.

“For some time, we’ve wanted a larger Western
Canada footprint and distribution center,” DeCata said.
“By really good fortune, when we started speaking
to Bolt Supply, we came to appreciate that they had a
warehouse in Calgary that was relatively new for them
and half-occupied. They were a very attractive fit for
us. We’ll be taking advantage of the other half of that
warehouse and making investments in Bolt Supply that
will accommodate both companies.”
Before Bolt, Lawson’s customers in Alberta and
Saskatchewan — roughly one-third of the company’s
total market in Canada — were served primarily out
of a distribution center in Mississauga, from which the
business cycle time is typically three-to-five days. Bolt’s
Calgary warehouse will cut that cycle down to two days.
Lawson started having talks with Bolt Supply in the
spring of 2017, eventually closing on the acquisition last
Industry Insider