Monday, February 25, 2013

Seeking Alpha: MSC Industrial Makes A Bold Bid For Scale

The North American MRO market is ripe for consolidation and MSC Industrial (MSM) has made it clear that it intends to be one of the consolidators. On Friday morning MSC Industrial announced a large transaction - an agreement to buy the North American distribution business of Barnes (B). This deal will not only add incremental revenue to MSC Industrial, but it also adds entire new lines of product distribution and customer categories.

The Deal To Be
Assuming that the deal goes through as planned, MSC Industrial will acquire the Barnes Distribution North America (BDNA) business of Barnes for $550 million in cash. MSC Industrial will pay for the deal with cash on hand and a credit facility/term loan that it later intends to refinance long term. All told, about $400 million of the purchase price will likely be borrowed at a long-term interest rate below 3%.

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MSC Industrial Makes A Bold Bid For Scale

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