DEERFIELD, Ill. – United Stationers, through its wholly owned subsidiary United Stationers Supply Co., has signed an agreement to acquire MEDCO, a United States wholesaler of automotive aftermarket tools and supplies, and its affiliates including G2S Equipment de Fabrication et d’Entretien ULC (G2S), a Canadian wholesaler.
Headquartered in Philadelphia, MEDCO is one of North America’s largest combined Paint, Body and Equipment (PBE) and Tool & Equipment wholesalers in the automotive aftermarket. With more than 50,000 products from more than 350 manufacturers, MEDCO serves traditional distributors, retailers and mobile tool dealers through nine distribution centers across the U.S. G2S, through three distribution centers, provides a similar offering to automotive aftermarket and industrial distributors and mobile tool dealers located across Canada. Together, MEDCO and G2S have annual sales of approximately $240 million.
"MEDCO and G2S advance a key pillar of our strategy, diversifying into higher growth and margin channels and categories," said P. Cody Phipps, United Stationers’ president and CEO. "Both are leaders in the growing automotive aftermarket and will expand our reseller customer base. Additionally, these businesses complement our existing industrial platform with their deep product knowledge and exceptional customer service. I am pleased to welcome the MEDCO and G2S employees to our organization."
"We are excited to join United Stationers and be part of their strategic diversification initiative," said Andrew Keim, MEDCO president. "Their scale, operational capabilities and financial strength will enable us to better support our existing customers while continuing to grow the business."
The all-cash purchase price is $130 million, subject to closing adjustments, with up to an additional $10 million to be paid over three years based on performance.
The transaction is expected to be complete during the fourth quarter of 2014 and is subject to regulatory approval and customary closing conditions. United Stationers plans to fund this acquisition through a combination of cash on hand and cash available under its revolving credit facility. The transaction is expected to be accretive to earnings within the first year.
