A Chicago distributor of maintenance and repair supplies made the largest acquisition in its history yesterday as it attempts to return to steady profits after years of losses.
Lawson Products paid $32.0 million for Calgary, Alberta-based Bolt Supply House, which distributes fasteners, power tools and industrial maintenance supplies in western Canada. Bolt Supply House has $34.5 million in annual sales, according to a Lawson press release.
It’s the fifth purchase in two years for Lawson, which has made acquisitions one part of a three-pronged strategy to grow its top and bottom lines. In 2016 Lawson reported $276.6 million in sales. The company also reported a $1.6 million loss, its fifth in the last six years.
The other two prongs are changing and expanding the sales force, and then fostering greater productivity from those representatives, said CEO Michael DeCata. But undertaking such major structural changes all at once led to losses. In 2013 the company converted 757 sales reps operating as independent agents to employees; since then the number has grown to 1,000. It also moved to SAP business process management software while closing some facilities and opening others.
“The investment community said, ‘Did you guys really need to eat the elephant in one bite?'” he said. “A lot happened all at once, and it’s cost us a lot of money.”
Yet the changes are revitalizing the company, DeCata said, and “we’re feeling great about where we are and the trajectory we’re on.”
The deal to buy Bolt Supply House presents two growth opportunities, DeCata said. Bolt House, with its 13 branches and 27 sales territory managers, will continue to operate under its own brand. The Canadian company’s 43,000-square foot warehouse has room for Lawson’s products, shortening the time to fill orders from five or six days to one to three.
Last year Lawson reported that 9 percent of its sales came from Canada. The acquisition will double Lawson’s number of transactions in Canada, according to the press release.
Lawson’s stock price was $25.10 in midday trading.