When something breaks, bursts, or drips, you can call Interline Brands, a national distributor and direct marketer of repair and maintenance products. The company sells about 100,000 plumbing, hardware, electrical, janitorial, and related products under private labels such as AmSan, CleanSource, Hardware Express, Maintenance USA, Sexauer, U.S. Lock, and Wilmar. Interline Brands operates 55 regional distribution centers and more than 25 showrooms that serve professional contractors throughout North America. Interline Brands, which went public in 2004, was formed in 2000 through the merger of the Wilmar, Barnett, and Sexauer companies. Two private equity firms acquired the company in 2012.
Affiliates of GS Capital Partners and company shareholder P2 Capital Partners purchased Interline Brands in September 2012 for $25.50 per share. The deal, valued at $1.1 billion, included the assumption of debt.
To the benefit of Interline Brands and as a testament to its strategy, demand for facilities maintenance products, which account for 76% of sales, has held up better than products to professional contractors (14%) and specialty distributors (10%) in recent years. The deep recession in the US and downturn in the housing market had dampened demand for some Interline Brands products and led to a decrease in sales.
To maintain its momentum, Interline Brands in late 2012 inked a deal to acquire cleaning and packaing products company JanPak. The $82.5 million all-cash purchase allows Interline Brands to expand its presence in the institutional market.
Headquartered in Jacksonville, Florida, the company maintains a network of 55 distribution centers and 27 professional contractor showrooms that are located in the US, Canada, and Puerto Rico. Through partnerships, Interline boasts 46 vendor-managed inventory locations among its largest customers. With a dedicated fleet of trucks, the company is able to provide next-day service to some 98% US residents and same-day delivery to those living in major metropolitan markets.
A sign that the economy is on the mend and its business is picking up, Interline Brands logged nearly 15% in sales increases in 2011 mostly as a result of targeted acquisitions made during the past year or two. The company acquired the assets of Northern Colorado Paper, a distributor of janitorial and sanitation supplies, for $9.5 million in cash in 2011. Previously the company purchased San Jose, California-based CleanSource, another distributor of janitorial and sanitation supplies, for about $60 million in 2010. CleanSource primarily serves institutional facilities in the healthcare and education markets, as well as building services contractors. The purchases have strengthened Interline Brands' presence in the facilities maintenance market and provided access to the Colorado and West Coast markets. Net income has been rising as well. As a percentage of sales, net income rose to 3% in 2011 from 2.6% in 2010 due to increased operating income. – less