After a takeover last year by a private equity consortium, HD Supply, San Diego, plans to return to an expansion mode with acquisitions, new branches and private label brand offerings through the company. However, nothing specific has been announced regarding expansion exclusive to the jan/san aspect of the Facilities Maintenance Division, said Erica Crossling, director of public relations and community affairs for HD Supply. This is a stark comparison to recent moves since the company has been active in divesting its other lines of business.

 

In early February, HD Supply’s deal to sell its HVAC business to Watsco Inc., Coconut Grove, Fla., fell through, but the sale of the lumber and building materials division to Pro-Buildings Holdings, Denver, was expected to close in early 2008.

The shift in business strategy to an expansion mode will eventually directly affect all of the company’s business lines.

“HD supply plans to grow the business this year across its 10 lines of business, including HD Supply Facilities Maintenance,” said Crossling. “Although we have not announced any specific plans for acquisitions or growth strategy, we look forward to sustainable value creation for our customers, our sponsors and our associates.”

Though the company has not made an announcement regarding the jan/san product line, Tom Murphy, sales manager for RoVic, Manchester, Conn., thinks the company could be successful in the particular field.

“They’re a worthy competitor,” he said. “They have never been real strong in the jan/san market, but it is not something they focused on. Based on their resources they could be good at it if they focused more attention on it.”

Based on the size of the company, its e-commerce business and cheaper product offerings, HD Supply and other big-box stores could give other distributors reason for worry if they decide to expand the jan/san side of the business.

Jan/san distributors however, have one significant advantage over big-box competitors. A company’s success in the jan/san market is dependent on forging strong personal relationships with the customer, said Keith Backhaus, marketing manager of Puritan Services, Eagan, Minn.

“Personality plays such a big part in it,” said Steve Rathbun, environmental solutions manager, Martin Bros. Distributing Co. Inc., Cedar Falls, Iowa. “We try to get our sales representatives to develop personal relationships with the customers. Something big-box stores cannot do.”

The relationships are also built on a large customer service aspect that big-box stores cannot offer, such as delivering after business hours and holding in-house training sessions on the products the customer purchased.

 

Los Angeles Ordinance Mandates Green Procedures

 

Los Angeles is ready to enact green building standards. A proposed ordinance requiring large, privately built commercial and residential developments to use green practices including reducing energy and water use is expected to be passed by the city council by the end of March.

The ordinance, which was passed by two city council committees, dictates that private projects that surpass 50,000 square feet need to incorporate the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) checklist into building plans in order to meet a “standard of sustainability.”

LEED standards could include credits for green cleaning. If Los Angeles passes the ordinance, it would be the largest city to extend green cleaning requirements to the private sector.

 

NEWS MAKERS

 

USGBC Increases Green Research

The U.S. Green Building Council (USGBC), Washington, D.C., doubled its funding commitment for green building research grants to be awarded in 2008 to $2 million. Of the additional $1 million in grants, $500,000 has been allocated for K-12 school facility research related to occupant impacts.

Coverall Continues Global Expansion

Coverall Cleaning Concepts, Boca Raton, Fla., announced a territory franchise agreement that will bring the company’s business to Kuwait and Qatar. The agreement gives the company a presence in 96 metropolitan markets including locations in the U.S., Canada, Japan, Singapore, Thailand, South Korea, Australia, Chile and the Dominican Republic.

Kuwait-based American General Trading & Contracting W.L.L. (AGT) is the territory franchise owner in both Kuwait and Qatar.

AGT plans to open a Coverall Cleaning Concepts Support Center in Kuwait this month and one in Qatar several months from now.

Package Aides Small Businesses

President George W. Bush signed a bill into law which includes tax breaks for small businesses.

H.R. 5140, The Recovery Rebates and Economic Stimulus for the American People Act of 2008 doubled expensing limits for small businesses and added an investment depreciation deduction.

The expensing limits increased from $125,000 to $250,000, giving small businesses the opportunity to re-stock inventory at a quicker rate, purchase more equipment for the company, enhance their product line, and hire personnel.

The 50 percent bonus depreciation deduction is meant to entice companies to invest in their business now, giving them an immediate deduction for half the cost of investment.

MERGERS & ACQUISITIONS

Newell Rubbermaid, Atlanta, signed a definitive agreement to acquire Technical Concepts Holdings, LLC, Mundelein, Ill., for approximately $445 million.

The transaction is subject to regulatory approval and closing conditions, but is expected to close in the first half of 2008. It is expected to be neutral earnings in 2008 and accretive in 2009.

The Walter E. Nelson Co. Corporate Group, Portland, Ore., has purchased Seajan Supply and Stephens Paper.

Seajan Supply, Kent, Wash., will consolidate with Walter E. Nelson Co., of Western Washington. Dave Belmont, president of Seajan will become senior sales representative with the company.

Stephens Paper, Pendleton, Ore., will be merged into Crown Paper of Walla Walla, a subsidiary of Walter E. Nelson Co. Jerry Stephens will be in charge of new account development.

Southeastern Paper Group, Spartanburg, S.C., acquired janitorial supply distributor Coastal Chemical, Myrtle Beach, S.C. Ken Chandler, the former owner of Coastal Chemical, will remain on staff as an area sales representative.

Tennant Co., Minneapolis, entered into a purchasing agreement with Applied Sweepers, Falkirk, Scotland, and Sociedade Alfa Ltda., Sao Paulo, Brazil.

Completion of the transactions are subject to concluding routine environmental due diligence and other customary closing conditions.

The current management of Applied Sweepers will stay in place. The terms of the deal with Sociedade Alfa Ltda., has not been disclosed.

Francis Kane has acquired General Floorcraft Products, Paterson, N.J. Kane says he will bring improvements and innovation to the 80-year-old company, but not change the quality or construction of the floor machines.

According to Kane, his goal for General Floorcraft is to provide elite service and make doing business with the company easy. The company plans on introducing new products and programs this year, along with looking for strategic alliances to advance the product brand.




POSTED ON: 3/1/2008