DXP Enterprises Completes Acquisition of Application Specialties, Inc.
January 03 2018 - 9:30AM
Business Wire
- $37 million in sales and $2.9 million
in adjusted EBITDA
- 3 New DXP locations in the Pacific
Northwest
- Differentiated custom tooling including
full service tool and cutter grinding facility
- Servicing customers in the aerospace,
construction, medical and firearm markets
DXP Enterprises, Inc. (NASDAQ: DXPE) today announced the
completion of the acquisition of Application Specialties, Inc.
(“ASI”), a leading distributor of cutting tools, abrasives,
coolants and machine shop supplies. DXP funded the acquisition with
cash on the balance sheet.
Founded in 1989, ASI is headquartered in Auburn, Washington and
operates out of three locations in the state of Washington
including Auburn, Everett and Vancouver. ASI is focused on serving
customers in the aerospace, construction, medical and firearm
markets with approximately 33 employees.
Financial terms of the transaction were not disclosed. Signing
of the definitive agreement occurred on January 1, 2018. Sales and
adjusted EBITDA were approximately $37 million and $2.9 million,
respectively. Adjusted EBITDA was calculated as income before tax,
plus interest, depreciation and amortization, and non-recurring
items that will not continue after the completion of the
acquisition.
David R. Little, Chairman and CEO remarked, “We are pleased to
welcome the ASI employees to the DXP team. ASI is a unique,
well-run business focused on providing value-added solutions to its
customers. ASI will provide DXP’s Metal Working division with new
geographic territory and enhance DXP’s end market mix. With ASI, we
continue to build on our strategy of providing a breadth of
technical products and services on a regional and local level. ASI
provides us scale and access to the U.S. Pacific Northwest market,
while allowing us to continue to serve our customer's evolving
needs. ASI is a great company with key differentiators and provides
us with high caliber people.”
“ASI is pleased to be part of the dynamic DXP family. This is a
great opportunity for our employees and customers. DXP has a great
legacy of growth and we plan to continue that growth. We are
excited for the next stage of ASI and helping DXP become a dominant
force within cutting tools, the aerospace industry and on the
Western side of the United States,” added Mel Whitney, President of
ASI.
Kent Yee, CFO added, “We are excited to welcome the talented and
hardworking employees of ASI to the DXP team. ASI is our first
acquisition in some time and is another exciting addition to DXP.
ASI provides us with scale and access into a geographic region we
have not historically served. ASI complements and diversifies DXP’s
products and end markets. This transaction will be positive for ASI
and DXP’s customers, employees and shareholders.”
ASI was advised by Cascadia Capital, LLC.
Non-GAAP Financial Measures
DXP supplements reporting of net income with non-GAAP
measurements, including EBITDA, Adjusted EBITDA and free cash flow.
This supplemental information should not be considered in isolation
or as a substitute for the unaudited GAAP measurements.
The Company believes EBITDA provides additional information
about: (i) operating performance, because it assists in comparing
the operating performance of the business, as it removes the impact
of non-cash depreciation and amortization expense as well as items
not directly resulting from core operations such as interest
expense and income taxes and (ii) the performance and the
effectiveness of operational strategies. Additionally, EBITDA
performance is a component of a measure of the Company’s financial
covenants under its credit facility. Furthermore, some investors
use EBITDA as a supplemental measure to evaluate the overall
operating performance of companies in the industry. Management
believes that some investors’ understanding of performance is
enhanced by including this non-GAAP financial measure as a
reasonable basis for comparing ongoing results of operations. By
providing this non-GAAP financial measure, together with a
reconciliation from net income, the Company believes it is
enhancing investors’ understanding of the business and results of
operations, as well as assisting investors in evaluating how well
the Company is executing strategic initiatives.
About DXP Enterprises, Inc.
DXP Enterprises, Inc. is a leading products and service
distributor that adds value and total cost savings solutions to
industrial customers throughout the United States, Canada, Mexico
and Dubai. DXP provides innovative pumping solutions, supply chain
services and maintenance, repair, operating and production ("MROP")
services that emphasize and utilize DXP’s vast product knowledge
and technical expertise in rotating equipment, bearings, power
transmission, metal working, industrial supplies and safety
products and services. DXP's breadth of MROP products and service
solutions allows DXP to be flexible and customer-driven, creating
competitive advantages for our customers. DXP’s business segments
include Service Centers, Innovative Pumping Solutions and Supply
Chain Services. For more information, go to www.dxpe.com.
The Private Securities Litigation Reform Act of 1995 provides a
“safe-harbor” for forward-looking statements. Certain information
included in this press release (as well as information included in
oral statements or other written statements made by or to be made
by the Company) contains statements that are forward-looking. Such
forward-looking information involves important risks and
uncertainties that could significantly affect anticipated results
in the future; and accordingly, such results may differ from those
expressed in any forward-looking statement made by or on behalf of
the Company. These risks and uncertainties include, but are not
limited to; ability to obtain needed capital, dependence on
existing management, leverage and debt service, domestic or global
economic conditions, and changes in customer preferences and
attitudes. In some cases, you can identify forward-looking
statements by terminology such as, but not limited to, “may,”
“will,” “should,” “intend,” “expect,” “plan,” “anticipate,”
“believe,” “estimate,” “predict,” “potential,” “goal,” or
“continue” or the negative of such terms or other comparable
terminology. For more information, review the Company’s filings
with the Securities and Exchange Commission.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180103005421/en/
DXP Enterprises, Inc.Kent Yee, 713-996-4700Senior Vice President
CFO
DXP Enterprises (NASDAQ:DXPE)
Historical Stock Chart
From Mar 2024 to Apr 2024
DXP Enterprises (NASDAQ:DXPE)
Historical Stock Chart
From Apr 2023 to Apr 2024