SunSource Holdings, a distributor of fluid power and fluid process components and systems in the US and Canada, is to acquire The United Distribution Group (UDG), a distributor of fluid conveyance and related products and services primarily serving maintenance, repair and operations (MRO) needs across energy, mining and other industrial end markets.
Terms of the transaction have not been disclosed.
UDG is one of the largest distributors of industrial components and assemblies in North America. With a national footprint often located near high-growth energy markets, UDG combines a comprehensive product offering of over 140,000 SKUs with a suite of value-added services to position the company as a strong partner to its blue chip customer and supplier bases. UDG operates through two subsidiaries: GHX Industrial (GHX), a leading distributor of fluid conveyance and sealing products serving upstream energy, downstream energy and diversified markets, and United Central Industrial Supply (UC), the leading provider of MRO supplies to underground and surface mining sites and other industrial facilities in North America. The average tenure of UDG’s top ten customers exceeds 35 years, and the company leverages its product, application and engineering expertise, value-added service capabilities such as custom fabrication and in-house welding and its long-term, integrated supplier relationships to deliver a superior value proposition to its customers.
“UDG shares many core business strengths and cultural values with SunSource, and the GHX and UC businesses are highly complementary with SunSource’s existing business and product portfolio,” says David Sacher, CEO of SunSource. “The combined company will occupy a strengthened position in the marketplace, benefiting from increased scale and an enhanced set of organic and inorganic growth opportunities, particularly in the fluid conveyance market. We believe the combination will drive incremental opportunities to create value for our customers, employees and suppliers, while also accelerating growth, profitability improvement and shareholder value creation.”
“We are extremely excited about this important strategic step that will enhance the prospects for both UDG and SunSource,” says Darrell Cole, President and CEO of UDG. “Both companies enjoy deep relationships with customers and suppliers, a commitment to value-added capabilities that address complex problems and a talented team of professionals committed to customer satisfaction and a relentless pursuit of continuous improvement.”
SunSource has obtained committed financing for the transaction from Barclays, Credit Suisse and Deutsche Bank AG.
Barclays acted as financial advisor and Debevoise & Plimpton acted as legal advisor to SunSource on the transaction, which is expected to close in August.
Baird served as financial advisor and Akin Gump Strauss Hauer & Field LLP was legal advisor to UDG.
