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An acquisitive company itself since its inception nine years ago, AmSan LLC, Chicago, recently was ac-quired by Interline Brands Inc., Jacksonville, Fla. The deal — estimated to be worth $127.5 million — will strengthen the market penetration of both companies, according to company executives.
Interline Brands is a direct marketer and distributor of maintenance, repair and operations (MRO) products and has total annual sales of more than $630 million. It operates under separate brands tailored to specific business sectors. AmSan will now be positioned to service customers seeking jan/san goods through Interline.
“All of this will be under the AmSan umbrella and AmSan management team, so we don’t have any plans to commingle this with a brand that we already have,” said William Sanford, Interline Brands executive vice president and COO.
With the acquisition of AmSan, Interline Brands will now have 10 separate brands. Sanford explained that all brands operate under a common logistical platform, so this gives AmSan access to 27 new geographical markets.
Prior to the acquisition, AmSan CEO Michael Mulhern viewed AmSan as a unique industry player — the only national distributor with a jan/san focus. He now sees the company becoming an even greater force in the industry because of its access to new geographical areas.
“These [markets include] very large cities like Las Vegas, Baltimore, Washington D.C., Orlando, Phoenix, and these are markets where we want to move swiftly to establish a jan/san presence,” said Mulhern. “We will do that in a number of ways, not the least of which is acquisitions in those markets. So, we’re going to look to broaden and expand our national footprint.”
AmSan’s own operations will remain largely unchanged. “The integration will include moving toward a common IT platform, but in terms of how we go to market and service customers, it will remain the same,” Mulhern explained.
Though Interline Brands purchased nearly all of the assets of AmSan’s operations, Mulhern said Interline did not purchase AmSan West, which included California operations in Sacramento and Los Angeles, nor did it purchase the Portland, Ore., facility.
“Since the announcement on May 23, we did sell the Portland operation to Service Paper Co., [Spokane, Wash.], and since we announced the deal, we have shut down our operations in Sacramento and Los Angeles,” Mulhern said.
The reason for the sale, Mulhern said, was that GTCR Golder Rauner, the private equity firm that orchestrated the “roll-up” that resulted in AmSan, was ready to sell.
“Typically, they’ll hold companies between seven and 10 years and then they either take them public or sell them to a strategic buyer,” said Mulhern. “So we’re nine years into it, and in simple terms, we were at the end of their investment horizon.”
While the companies’ expansion into new geographical markets is seen as a boon, both companies are also seeing opportunities with current customer bases. Mulhern said Interline Brands has 40,000 facilities maintenance customers that buy MRO products, but until now, they had no opportunity to purchase jan/san products through Interline; AmSan has 40,000 jan/san customers that can now source their MRO products through Interline.
“So, through this acquisition and business combination, we now have a terrific opportunity with a combined 80,000 customers to meet a broader set of product needs,” Mulhern said. “We view it as incredibly strategic on the part of Interline Brands and we think it’s a terrific opportunity for our associates and customers.”
ISSA Amsterdam Attendees Find A Different Kind Of Show
ISSA has been in the process of developing its “Cleaning Industry Management Standard” for months, and the association is asking industry members to comment on the draft standard by August 4.
The standard outlines procedures and principles that in-house cleaners and building service contractors (BSCs) should consider when implementing quality management programs.
While much of the standard applies specifically to in-house providers and BSCs, there are some aspects that concern distributors as well.
Under the “Service Delivery” category, which includes purchasing, staffing and handling of unexpected events, there is a section on the bidding/costing process. Within this portion of the standard, it is suggested that organizations consider the cost of materials as part of the service delivery plan.
Several points under the “Purchasing Procedures” category affect distributors. Within this section, the standard recommends that product and equipment evaluations be incorporated into the procurement process. It also states that similar equipment and supplies should be used in similar facilities within an organization.
The “Purchasing Procedures” section also suggests using appropriate financial controls, including: supply and equipment requisition, approved vendor list, order placement, receiving inventory and accounts payable.
Finally, there is a section on training and management under the “Human Resources” category that focuses on training of management and training of cleaning personnel.
ISSA plans to finalize and publish the standard by the end of 2006. The association then plans to launch a pilot program in North America to certify cleaning companies and departments that have a quality-managed and customer-oriented organization.z
NEWS MAKERS
New Business Resource Available From NAW
The National Association of Wholesaler-Distributors (NAW) and Deloitte Consulting LLP recently released “Driving Growth and Shareholder Value: The Distribution Value Map.”
The book, a $2 million, three-year project, is intended to serve as a resource to help distributors connect business strategy with daily operations execution to achieve acceptable returns. Maps and worksheets that accompany the book help businesses visually understand and determine the best ways to turn ideas into profits.
Internet Slowly Improving Distributor Leads
HA recent poll found that 56 percent of distributors believe the Internet has improved their sales efforts, though there is room for improvement.
The poll, which surveyed more than 600 distributors, was conducted by AlturaSolutions Communications, Chicago and commissioned by Enviro-Solutions, Peterborough, Ontario. It found that about 41 percent of distributors’ online sales leads come from manufacturers’ Web sites; 27 percent from distributors’ own Web sites; and about 31 percent come from industry-specific online publications of trade associations.
As for the quality of the Internet leads, 9 percent rated them as “excellent;” 22 percent said “good;” 39 percent said “fair;” and 30 percent answered “poor.”
Solvents Demand In United States Growing
TThe Freedonia Group Inc., Cleveland, has found that the demand for solvents — which are used in the manufacture of cleaning solutions — will see an increase of almost 1 percent per year, growing to $4.4 billion in 2010. The study noted a growing demand for green solvents; while they are expected to comprise only 11 percent of the overall market volume in 2010, they will capture over 20 percent of market value.
MERGERS & ACQUISITIONS
Castle Rock Industries Inc., Englewood, Colo., was recently acquired by Alfred Karcher GmbH & Co., Winnenden, Germany. Castle Rock is the parent company of the Windsor, Prochem, Century 400, TecServ and Graco brands.
The acquisition of these brands strengthens Karcher’s presence in several markets: floor care equipment, professional carpet cleaning, service and parts, and increases the combined companies’ international exposure.
Tacony Corp., Fenton, Mo., recently announced it has agreed to acquire all the equity of Truvox Intl., United Kingdom. The merger combines Tacony Corp.’s Powr-Flite Commercial Floor Care Division and CFR Environmental Carpet Cleaning Systems in the United States, with the Truvox and Cimex branding in the United Kingdom, Europe, the Mid-East, Africa and Asia-Pacific.
At the same time, Cimex-USA, Tallmadge, Ohio, announced that it remains the sole importer of Cimex commercial floor machines in North America.
HP Products Corp., Indianapolis, recently acquired Kraft Paper Sales Co., Harvey, Ill. The acquisition will strengthen the company’s presence in the Midwest, and it anticipates and expansion of its product line in the third quarter of 2006.
GREEN NEWS
The U.S. Environmental Protection Agency (EPA) is in the process of developing WaterSense, a voluntary program that certifies water-efficient products, such as toilets, urinals and faucets. Products that meet the EPA’s criteria for premium water efficiency and performance will be eligible for the label.
The intent of the program is to help consumers easily identify products that use less water, but that still offer quality performance.
The EcoLogo Program — a facet of the Environmental Choice Program — has teamed with Green Seal to develop criteria for environmentally preferable hand soap. This will enable companies that meet the criteria to receive certification from both groups.
The new criteria expands upon and replaces the EcoLogo CCD 104 standard for industrial cleaners, which was created in 1997.
The new criteria outlines specifics for hand soap used in industrial and institutional facilities. It does not cover those cleaners used in homes, in food preparation operations, or medical facilities, nor does it set specifics for anti-bacterial hand soap, disinfectants or hand sanitizers.
ISSA recently made public its support of the EPA’s Safer Detergent Stewardship Initiative (SDSI). This voluntary program aims to end the use of nonylphenol ethoxylate (NPE) — an ingredient used in detergents and cleaning products — because it is harmful to aquatic life.
The EPA held a hearing in June on the topic, and ISSA director of legislative affairs, Bill Balek, testified that ISSA supports the move to more environmentally preferable ingredients.
However, he stressed the SDSI should be structured to ease the financial burden companies take on when switching to green chemicals, and encouraged the agency to publicly recognize companies that participate in SDSI.
According to an article in the June 2006 issue of Harvard Business Review, “green” buildings are more than just a trend — they are here to stay.
The article, “Building the Green Way,” notes that several large companies, such as Bank of America, IBM and Toyota, are pushing green-building standards, furthering green’s presence in mainstream business.
There are several reasons for the growing interest in green buildings: financial advantages, workforce benefits, comparable construction costs and the fact that there are rating systems like The U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED).
| Correction
There were several omissions in SM’s “Green Product Directory,” published in the June 2006 issue. The following companies have products certified by the Environmental Choice Program’s EcoLogo: |