Executives Comment on Interline's Acquisition of AmSan
An acquisitive company itself since its inception nine years ago, AmSan LLC, Chicago, recently was ac-quired by Interline Brands Inc., Jacksonville, Fla. The deal — estimated to be worth $127.5 million — will strengthen the market penetration of both companies, according to company executives.
Interline Brands is a direct marketer and distributor of maintenance, repair and operations (MRO) products and has total annual sales of more than $630 million. It operates under separate brands tailored to specific business sectors. AmSan will now be positioned to service customers seeking jan/san goods through Interline.
“All of this will be under the AmSan umbrella and AmSan management team, so we don’t have any plans to commingle this with a brand that we already have,” said William Sanford, Interline Brands executive vice president and COO.
With the acquisition of AmSan, Interline Brands will now have 10 separate brands. Sanford explained that all brands operate under a common logistical platform, so this gives AmSan access to 27 new geographical markets.
Prior to the acquisition, AmSan CEO Michael Mulhern viewed AmSan as a unique industry player — the only national distributor with a jan/san focus. He now sees the company becoming an even greater force in the industry because of its access to new geographical areas.
“These [markets include] very large cities like Las Vegas, Baltimore, Washington D.C., Orlando, Phoenix, and these are markets where we want to move swiftly to establish a jan/san presence,” said Mulhern. “We will do that in a number of ways, not the least of which is acquisitions in those markets. So, we’re going to look to broaden and expand our national footprint.”
AmSan’s own operations will remain largely unchanged. “The integration will include moving toward a common IT platform, but in terms of how we go to market and service customers, it will remain the same,” Mulhern explained.
Though Interline Brands purchased nearly all of the assets of AmSan’s operations, Mulhern said Interline did not purchase AmSan West, which included California operations in Sacramento and Los Angeles, nor did it purchase the Portland, Ore., facility.
“Since the announcement on May 23, we did sell the Portland operation to Service Paper Co., [Spokane, Wash.], and since we announced the deal, we have shut down our operations in Sacramento and Los Angeles,” Mulhern said.
The reason for the sale, Mulhern said, was that GTCR Golder Rauner, the private equity firm that orchestrated the “roll-up” that resulted in AmSan, was ready to sell.
“Typically, they’ll hold companies between seven and 10 years and then they either take them public or sell them to a strategic buyer,” said Mulhern. “So we’re nine years into it, and in simple terms, we were at the end of their investment horizon.”
While the companies’ expansion into new geographical markets is seen as a boon, both companies are also seeing opportunities with current customer bases. Mulhern said Interline Brands has 40,000 facilities maintenance customers that buy MRO products, but until now, they had no opportunity to purchase jan/san products through Interline; AmSan has 40,000 jan/san customers that can now source their MRO products through Interline.
“So, through this acquisition and business combination, we now have a terrific opportunity with a combined 80,000 customers to meet a broader set of product needs,” Mulhern said. “We view it as incredibly strategic on the part of Interline Brands and we think it’s a terrific opportunity for our associates and customers.”
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