Uni-Select Inc. will add 31 distribution centres and 145 corporate stores in 18 U.S. states as a result of a deal it has struck to buy Middle Atlantic Warehouse Distributor Inc., based in Tonawanda, N.Y.
Uni-Select said late Wednesday it had entered into a binding agreement to buy the U.S. retailer through the Canadian company’s U.S. subsidiary, Uni-Select USA Inc.
Financial terms of the cash and share acquisition – which will more than double the size of the Canadian company – were not revealed.
Middle Atlantic operates 31 distribution centres and 145 corporate stores in 18 states in the East Coast, Midwest and Southwest regions, employing more than 1,800 people, which means that that Uni-Select will more than double its employment burden with the deal (Uni-Select currently has 1,300 on staff). The organization says that it also supplies more than 1,500 independent jobbers. Revenues last year topped $300 million U.S.
Uni-Select currently sells through a network of some 800 stores in Canada and 400 in the U.S. Revenues in 2003 were $722 million CDN.
With the deal, expected to close November 1, Uni-Select significantly increases its market reach in the U.S. where it already has a presence in the central and northwestern states. After the acquisition, Uni-Select will generate annual revenues of about $470 million US from the American market.
The U.S. distributor is currently owned by the Buzzard family, which could end up owning as much as 12% of the distributor if they choose to exercise their options. In any case, the family will certainly have some ties, as current Middle Atlantic’s president Jim Buzzard will run Uni-Select’s U.S. operations and chairman Clay Buzzard will join the Canadian company’s board.
“This merger is the right thing to do, and this is the right time to do it,” Clay Buzzard said in a release. “We are confident we have found the right partner in Uni-Select.”
Uni-Select president and CEO Jacques Landreville said the deal benefits both companies.
“Middle Atlantic’s footprint is almost a perfect complement to Uni-Select USA’s. This combination with will allow our new expanded operations in the U.S. to pursue its objectives of becoming a credible consolidator and supporter of independent jobbers in the U.S. and creating value for our shareholders.”
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