The Home Depot Inc., the world’s largest home improvement store chain announced on August 30, that it completed the sale of its wholesale distribution company, HD Supply, to a group of private equity firms comprising Bain Capital, The Carlyle Group and Clayton, Dubilier & Rice Inc., for $8.5 billion.

HD Supply, a diversified wholesale distributor of construction and maintenance-related products in North America, with annual sales of more than $13 billion, was originally priced to sell to the same group of firms for $10.3 billion in June of this year.

But since then, financial markets have faced turmoil and Home Depot was forced to restructure its original contract with the buyers in early August, reducing the sale price by nearly $2 billion.

The acquisition of HD Supply includes a portfolio of 11 businesses and HD Supply Canada.

The company announced that it will retain the HD Supply name under new ownership, and the branding underneath the company will also remain the same.

The company also confirmed that the HD Supply Facilities Maintenance business will continue to serve existing owners of multifamily, hospitality, educational and commercial properties; healthcare providers; and municipal and government facilities.

“We are thrilled to be associated with this group of distinguished private equity firms, and we are excited about the tremendous opportunities that lie ahead for our associates, our customers and our new owners,” said Joe DeAngelo, CEO of HD Supply. “As an independent company, we can now accelerate our momentum in serving the comprehensive needs of our professional customers with the best products and customer service in the industry.”

The move to sell its supply arm came just weeks after a major overhaul at Home Depot.

In February of this year, one month after new CEO Frank Blake took over the company’s reigns, Home Depot began a strategic review of HD Supply in an effort to increase the company’s focus on its core retail business. After a thorough review of alternatives, the board unanimously approved the sale of HD Supply, the company Blake’s predecessor, Rob Nardelli, invested heavily in during his term.

With the completed agreement, Home Depot will retain a 12.5 percent stake in HD Supply and guaranteed $1 billion of debt the buyers took on to complete the transaction.


Illinois Signs Green Clean Schools Act
Illinois Governor Rod R. Blagojevich signed the Green Clean Schools Act on August 13, making Illinois just the second state in the United States, along with New York, to necessitate green cleaning in schools.

The law requires educational facilities to purchase environmentally sensitive cleaning products. However, the law does not require schools to throw away existing supplies, rather it allows time for schools to order less toxic supplies in the next normal procurement cycle.

The law’s passage represents a victory for Illinois children, teachers, school nurses, community leaders and children’s health advocates around the U.S. who are working to make green cleaning the norm in schools.

“People from all different aspects of the school world — from nursing to the cleaning industry — are realizing how important green cleaning is and are really speaking up to advocate for it,” said Mark Bishop, deputy director of the Healthy Schools Campaign.


Greening The Supply Chain Not A Passing Trend
More than 50 percent of companies have policies on greening their supply chain, and companies are nearly unanimous in their belief that green supply chains will only continue growing according to a survey conducted by procurement company, EyeForProcurement.

The survey asked 188 procurement professionals — primarily in the United States, Europe and Asia — about their companies’ practices, policies and plans for reducing the environmental impact of the materials used in their work.

The vast majority of products companies are sourcing sustainably are packaging materials and raw materials used in manufacturing. Twenty-nine percent of respondents said they purchase packaging materials from sustainable sources, and 24 percent said they buy raw materials from likewise sources.

Two-thirds of respondents said that they are practicing green procurement to support their companies’ environmental or sustainability strategies, while 49 percent also said they’re responding to customers’ interest in eco-friendly products and services.

Companies also agree that greening the supply chain is not a passing trend. Ninety-eight percent of the responding companies said that green purchasing will continue to expand, and the report notes that customers from all sectors and all countries are increasingly demanding eco-friendly products and services.


Antibacterial Soaps Show No Health Benefits Over Plain Soaps
A report released in August by the University of Michigan’s School of Public Health revealed that antibacterial soaps show no health benefits over simple bath soaps, and in fact, may render some common antibiotics less effective.

Allison Aiello, an epidemiologist who directed the research, revealed that washing hands with an antibacterial soap was no more effective in preventing infectious illness than plain soap.

Moreover, antibacterial soaps at formulations sold to the public do not remove any more bacteria from the hands during washing than plain soaps.

Because of the way the main active ingredient in many antibacterial soaps — triclosan — reacts in the cells, it may cause some bacteria to become resistant to commonly used drugs such as amoxicillin, Aiello noted.

These changes have not been detected at the population level, but e-coli bacteria bugs adapted in lab experiments showed resistance when exposed to as much as 0.1 percent weight/volume of triclosan soap.

”What we are saying is that these e-coli could survive in the concentrations that we use in our [consumer formulated] antibactrial soaps,” Aiello said. ”What it means for consumers is that we need to be aware of what’s in the products.”

Aiello based her conclusions on 27 studies conducted between 1980 and 2006, and found that soaps containing triclosan within the range of concentrations commonly used in the community setting (0.1 to 0.45 percent wt/vol) were no more effective than plain soaps.

Triclosan is used in higher concentrations in hospitals and other clinical settings, and may be more effective at reducing illness and bacteria.

The United States Food and Drug Administration (FDA) does not formally regulate the levels of triclosan used in consumer products.


NEWS MAKERS

3M Plant Earns Entry Into OSHA’s VPP
The 3M Co. plant in Columbia, Mo., which houses some of the manufacturer’s maintenance supplies has earned membership in the U.S. Department of Labor’s Occupational Safety and Health Administration’s (OSHA) prestigious Voluntary Protection Programs (VPP) at the highest, or ”Star” level.

3M’s facility joins an elite corps of more than 1,700 worksites in more than 270 industries nationwide that have earned entry into OSHA’s VPP.

Requirements include a high degree of management support and employee involvement, a high-quality worksite hazard analysis, prevention and control programs, and comprehensive safety and health training for all employees. Each of these elements must be effective, in place, and in operation for at least one year before a company can apply to join the VPP.

Former President Clinton Headlines Greenbuild
The U.S. Green Building Council (USGBC) announced that former U.S. President Bill Clinton will deliver the keynote speech at the Greenbuild International Conference and Expo, held Nov. 7-9 at the McCormick Place West Building in Chicago.

Business Bankruptcy Filings On The Rise
The number of businesses that filed for bankruptcy during the first half of 2007 is 45 percent higher than last year, according to Euler Hermes ACI, an Owings Mills, Md.-based credit-insurance firm.

Filings rose by 7 percent from the first of the year to 6,705 in the second quarter. Last year, changes to federal bankruptcy laws were responsible for a 50 percent decline in corporate insolvencies, but things are different this year. The firm forecasts that 30,000 businesses will declare bankruptcy by the end of 2007.


MERGERS & ACQUISITIONS

Distributor Partners of America (DPA), Cincinnati, a North American buying and networking organization, has purchased RAH & Assoc., a 25-year-old national rep and marketing company that specializes in representing supply-side (non-retail) manufacturers to national supermarket chains.
RAH & Assoc. sells, maintains and manages all required paperwork for Kroger Co., SuperValu, Safeway, Publix, Winn Dixie and many other grocery chains.

Ecolab Inc., St. Paul, Minn., has agreed to purchase Microtek Medical Holdings Inc., an Alpharetta, Ga.-based manufacturer and marketer of infection control products for healthcare and acute care facilities.
Microtek’s 2006 sales were $142 million. Closing is expected to occur in the fourth quarter.

DXP Enterprises Inc., a Houston-based products and services distributor for the maintenance, repair, operating and production (MROP) markets, has agreed to acquire Precision Industries Inc., Omaha, Neb., for $106 million in cash.

Solutex Inc., Sterling, Va, acquired Metrochem Industries, Gaithersburg, Md. Both companies supply customers in the Washington, D.C. metro area with janitorial products and building maintenance chemicals. This is the third acquisition for Solutex in recent years.

New York-based Clayton Dubilier & Rice Inc., recently completed its acquisition of The ServiceMaster Co., Memphis, Tenn., for approximately $5.5 billion.

Armor Metal Group, Mason, Ohio, has acquired the assets of Witt Industries, Cincinnati.
Armor, a diversified manufacturer, views the acquisition of Witt as an opportunity for both companies to enter new markets.




POSTED ON: 9/1/2007