To further diversify its business beyond the cyclical construction market, Hughes Supply Inc., Orlando, Fla., has entered into a deal to buy Century Maintenance Supply Inc., Houston, for $360 million.
Century, which distributes building products ranging from floor polishers and light bulbs to back-up generators, is one of the nation's largest and fastest-growing distributors of MRO products to property management companies in the United States. Its nationwide distribution network includes 39 branches in major metropolitan markets in 35 states.
Century's sales and operating income for the 12 months ended Sept. 30 were $311 million and $35 million, respectively.
Tom Morgan, president and CEO of Hughes Supply, said, “This transaction is our largest acquisition to date and is a strategic move into the estimated $10 billion MRO industry. In combination with our existing MRO business, this acquisition will make Hughes a leader in the apartment MRO market and facilitate our entry into other MRO markets. Additionally, it will allow us to expand our geographic presence, enabling us to more effectively serve national property management companies throughout the United States.”
The boards of directors of Hughes and Century have approved the merger agreement. Its completion is subject to customary conditions, including regulatory approvals required under the Hart-Scott-Rodino Act. The total consideration in the merger will be $360 million (including the assumption of Century's indebtedness), and the merger is anticipated to close as soon as all regulatory approvals are received.
According to Hughes Supply, Century's anticipated growth rate in the next few years is nearly twice that of Hughes. Hughes said it will be well-positioned to move into adjacent geographic territories and other attractive MRO markets, including lodging and health care, assisted living, education and government/military facilities.