According to PitchBook, Private Equity investors have invested in 77 companies in the distribution industry since the beginning of 2009. Approximately 43% of the investments were add-ons, indicating that investors are strengthening their original portfolio investments. Deal activity in the industry nearly doubled last year’s total, as distributors and wholesalers saw 47 deals, compared to 27 in 2009.
The economic recession presented numerous challenges, but it was also accompanied by an increased emphasis on efficiency which proved to be beneficial for distributors who received premiums from financial investors. Companies can be expected to continue looking for more cost effective ways to bring their products to the market, a shift that should continue to attract PE investment toward the distribution and wholesale sector.