A. O. Smith completes acquisition of Lochinvar
Milwaukee — A. O. Smith Corporation has completed its acquisition of Lochinvar Corporation. The purchase price was approximately $418 million, which was funded from A. O. Smith’s cash and revolving credit facility. A. O. Smith received notification from the Federal Trade Commission that it had terminated the Hart-Scott-Rodino waiting period pertaining to the transaction.
Privately held Lochinvar is a leading manufacturer of high-efficiency boilers used in commercial and residential hydronic heating and hot water applications. A. O. Smith expects the acquisition to be accretive to earnings per share in the amount of approximately $.10 in the fourth quarter of 2011, excluding one-time purchase accounting charges and professional fees related to the acquisition and in the range of $.40 to $.50 per share in 2012.
“The addition of Lochinvar represents an excellent fit with our strategy to become a leading global water technology company,” said Paul Jones, chairman and CEO of A. O. Smith Corporation, in announcing the completion of the sale transaction.
“Lochinvar is a well-known and widely respected brand in our industry, and their emphasis on energy efficient products, world-class quality and outstanding customer service fits well with our existing water heater business. We’re excited about the opportunity to grow the Lochinvar business, both domestically and outside of the U. S.”
Cowan Supply opens luxury showroom
Atlanta — Cowan Supply, a longtime provider of commercial and residential plumbing materials to the Atlanta area, opened a new, luxury showroom and expanded commercial sales area at 3032 Bankers Industrial Drive, Suite A, Atlanta. The new location represents a significant step forward for the 65-year-old company.
“The idea is to continue to offer the quality service we’re known for but with even more variety,” said company manager Mike MacFarlane. “This is a place where consumers can find the widest range of luxury products for the home available. At the same time, the trade professionals who have come to know and trust us will have an even better and more comprehensive selection.”
The new 4,000-square-foot showroom includes the latest in plumbing products, which can be experienced firsthand by homeowners and trade professionals. The facilities are equipped with areas for designers and home builders/remodelers to meet with their clients, as well as areas for industry training and events. The company plans to offer several events throughout the year for designers, trade professionals and consumers.
Counter sales are open Monday through Friday from 7 a.m. to 4:30 p.m. Showroom hours are 9 a.m. to 4:30 p.m., and it is available for appointments or for walk-in clients.
Zurn Industries continues investment in distribution centers
Erie, Pa. — Zurn Industries LLC, manufacturer of engineered plumbing products, has opened a new West Coast distribution center, located at 3690 Jurupa St., in Ontario, Calif. This investment expands service capacity to a state-of-the-art, 115,000-square-foot facility, including regional training facilities and capability for future capacity expansion.
Zurn continues to make investments and changes that are consistent with their mission statement: “Zurn places the customer first, building value and trust through superior knowledge of the global markets we serve. Our products and services will continue to provide innovative water solutions delivered by exceptional people.”
The new facility allows Zurn to serve customers quicker, while increasing on-time delivery and single shipment on-time delivery.
“We are excited about bringing this capability to our customers on the West Coast. This facility expansion is only one of many investments Zurn will be making for improving service levels across all regions for our customers,” said Craig Wehr, GM of the specification drainage group at Zurn.
Billtrust buys Invoice Connection
Monroe Township, N.J. – Billtrust, a premier provider of outsourced billing services, has acquired Invoice Connection, a leading automated invoice and statement delivery company headquartered in Carlsbad, Calif.
Invoice Connection has a significant presence in the wholesale distribution vertical. Billtrust’s suite of services is particularly aligned with the unique needs of that market, and the acquisition provides additional value to the customers they serve.
“Our respective companies have a great deal of respect for each other because we share the same unwavering commitment to client service,” said Flint Lane, Billtrust CEO and president. “Customers coming into the Billtrust fold will have access to an even broader range of print/mail and electronic billing services.”
Colleen Stempien, president of Invoice Connection, added, “I’m confident our customers will be well-served by Billtrust. Their reputation for excellent service and their state-of-the-industry capabilities will be invaluable to our customers’ continued success.”
Billtrust is aggressive in winning new customers and growing revenue in the outsourced billing market. The company has been listed on the Inc. 500/5000 for five consecutive years, and their CEO was recently named one of the 25 Most Influential Financial Operations Professionals by the Institute of Financial Operations.
Billtrust will begin to transition Invoice Connection customers immediately. Both companies declined to disclose financial details of the transaction.
Near-record heat unable to stem 5-mo. decline in distributor growth
Columbus, Ohio —HARDI announced North American HVAC/R average distributor sales for July 2011 up 4.9% from the same month last year, a decline from last month’s 6.8% growth. July marked the fifth out of the last six months in which the annual distributor growth rate declined. HARDI’s monthly Targeted and Regional Economic News for Distribution Strategies (TRENDS) report showed growth in five of seven U.S. regions, only one experienced double digit improvement compared to July 2010. Canada, however, had its best month of the year, up over 10%, a sharp contrast to U.S. distributor sales average of 4.8%.
Inventory levels were up in every North American region for the third consecutive month. Days Sales Outstanding (a measure of how quickly customers pay their bills) finally retreated to under 50 days, after five months of consecutive increases. Last month’s strong 30% increase in distributor productivity reflected by sales per employee backtracked by nearly 10% as July sales failed to meet distributor expectations.
“The West Region has consistently reported weaker sales growth in 2011 than the other HARDI regions. The slower growth in the West is likely due to the relatively higher foreclosure rates and falling home prices that are depressing the housing markets in that area. Home foreclosure rates in Arizona, California and Nevada are at more than one in every 300 homes, versus the one in 600 homes average for the U.S. We expect the diverse set of housing market dynamics across the U.S. and Canada to continue to play a role in future distributor sales this year,” said HARDI economist, Andrew Duguay of the Institute for Trend Research (ITR).
HARDI executive vice president and COO Talbot Gee, added, “July shows a shift in growth away from the Northeast and Mid-Atlantic to the middle of the country. Unfortunately, 2011 is shaping up to meet our forecast of modest growth and eroding margins on average; however, those who are doing it right are starting to separate farther from the pack.”
HARDI has already begun advising members to quantify the impact the $1,500 tax credit expiration last year had on fourth quarter sales, since Q4 2011 is likely to significantly lag.
“July’s unitary sales data continues the monthly rise in R-22 unit sales but, perhaps more enlightening, overall unitary sales are effectively flat with this time last year,” said Gee. “Unitary sales volumes are not growing and may even fall below our forecast for 2011.”