DXP Enterprises, Inc. (NASDAQ: DXPE) announced today its intent to acquire substantially all the assets of C.W. Rod Tool Company ("CW Rod"), a leading distributor of state-of-the-art cuttings tools, abrasives, coolants and machine shop supplies.
Founded in 1978, C.W. Rod Tool Company is headquartered in Houston, Texas and operates out of seven locations in the Texas and Louisiana markets. CW Rod is focused on serving customers in the oil & gas and general industrial markets. CW Rod goes to market as a high service branch based operator and has approximately 115 employees.
Financial terms of the transaction were not disclosed. The purchase price will be financed with borrowings under DXP’s existing credit facility. DXP expects to close the transaction within the next 30 days. Sales and adjusted EBITDA for CW Rod for the last twelve months ending November 30, 2011 were approximately $56.9 and $7.0 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 completion of the acquisition.
David Little, Chief Executive Officer, stated, “We are very pleased to announce our intent to acquire C.W. Rod Tool Company. Along with our recent acquisition of Kenneth Crosby, CW Rod will expand our cutting tool offering and provide us with an opportunity to better serve our customers' needs. Similar to DXP, CW Rod is focused on providing superior customer service and product expertise. CW Rod is a great company with high caliber people.”
Chuck Rod, President of CW Rod, stated, "Our expertise in the cutting tool segment 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 and services to better serve our customers."
Kent Yee, Senior Vice President Corporate Development, stated, "CW Rod complements our recent acquisition of Kenneth Crosby and allows us to effectively serve both OEM and MRO cutting tool customer needs. The acquisition will expand our market share in Texas and Louisiana. CW Rod is focused on providing high quality service and technical expertise. We anticipate this acquisition to be accretive to earnings and will provide us with a strong platform in the cutting tool market going forward."