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DXP Enterprises (NASDAQ: DXPE) announces the acquisition of Drydon Equipment and Burlingame Engineers, enhancing its position in the water and wastewater treatment markets. Drydon specializes in pumps, valves, and controls in Illinois, Indiana, Wisconsin, and Michigan, while Burlingame focuses on California's industrial and municipal sectors. Financial terms are undisclosed, but DXP utilized cash and stock for the acquisitions. These transactions align with DXP's strategy for growth and diversification, aiming to increase market share and improve customer service capabilities.
Positive
Expansion into water and wastewater treatment markets.
Acquisitions of Drydon and Burlingame enhance sales expertise.
Expected to be accretive to earnings and boost market share.
Strengthens DXP's presence in key geographical areas.
Negative
None.
Two leading distributors focused on servicing the water and wastewater treatment markets
Adds New Rotating Equipment Geography
Continues to Accelerate End Market Diversification
Attractive Margins and Cash Flow
HOUSTON--(BUSINESS WIRE)--
DXP Enterprises, Inc. (NASDAQ: DXPE) today announced that it has completed the acquisitions of Drydon Equipment, Inc. (“Drydon”) and Burglingame Engineers ("Burlingame”).
Drydon is a leading distributor and manufacturers representative of pumps, valves, controls and process equipment focused on serving the water and wastewater industry in the Central and Northern Illinois, Northwest Indiana, Wisconsin and the Upper Peninsula of Michigan territories and markets. Burlingame is a leading California provider of water and wastewater equipment in the industrial and municipal sectors. Financial terms of the transactions were not disclosed. DXP funded the acquisitions with cash from the balance sheet and DXP Enterprises, Inc. common stock as consideration.
“We are pleased to announce these acquisitions and start the year off with great additions to our water and wastewater growth efforts. We are excited to have Drydon and Burlingame join the DXP family. Each company provides DXP with exceptional sales expertise that will enhance our efforts and our ability to collaborate and serve our customers as well as grow our DXP Water platform. These acquisitions are consistent with our growth strategy and demonstrate our commitment to expanding DXP into the water and wastewater treatment markets as well as maintaining our leading position as the largest distributor of rotating equipment in North America,” commented David Little, CEO of DXP.
Signing of the definitive agreements occurred on March 1, 2022. Sales and adjusted EBITDA for Drydon and Burlingame for the last twelve months ending December 31, 2021 were approximately $8.9 million and $1.4 million, respectively. Adjusted EBITDA was calculated as income before tax, plus interest, plus depreciation and amortization, plus non-recurring items that will not continue after the acquisition.
"Their expertise in the water and wastewater markets will complement DXP's breadth of technical products and services. This transaction will not only allow us to continue with our existing marketing strategies, but gives us additional products, services and resources to better serve our customers," added David Little.
Kent Yee, CFO, stated, "We continue to execute on our strategic priorities and strategy of making acquisitions in markets and business models where we can continue to enhance DXP. Drydon and Burlingame complement our recent focus on water and wastewater acquisitions and provide us with platforms in their respective markets to effectively serve the water and wastewater customer needs. We look forward to scaling the businesses and further diversifying DXP. The acquisitions will expand our market share in the water and wastewater markets, the Illinois, Wisconsin and California markets and our leading rotating equipment product division. We anticipate these acquisitions to be accretive to earnings and will provide us with a strong platform going forward."
About DXP Enterprises, Inc.
DXP Enterprises, Inc. is a leading products and service distributor that adds value and total cost savings solutions to industrial customers throughout the United States, Canada and Dubai. DXP provides innovative pumping solutions, supply chain services and maintenance, repair, operating and production ("MROP") services that emphasize and utilize DXP’s vast product knowledge and technical expertise in rotating equipment, bearings, power transmission, metal working, industrial supplies and safety products and services. DXP's breadth of MROP products and service solutions allows DXP to be flexible and customer-driven, creating competitive advantages for our customers. DXP’s business segments include Service Centers, Innovative Pumping Solutions and Supply Chain Services. For more information, go to www.dxpe.com.
The Private Securities Litigation Reform Act of 1995 provides a “safe-harbor” for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made by or to be made by the Company) contains statements that are forward-looking. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future; and accordingly, such results may differ from those expressed in any forward-looking statement made by or on behalf of the Company. These risks and uncertainties include, but are not limited to; ability to obtain needed capital, dependence on existing management, leverage and debt service, domestic or global economic conditions, and changes in customer preferences and attitudes. In some cases, you can identify forward-looking statements by terminology such as, but not limited to, “may,” “will,” “should,” “intend,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “goal,” or “continue” or the negative of such terms or other comparable terminology. For more information, review the Company’s filings with the Securities and Exchange Commission.
