Business Strategy and Outlook| Dawit Woldemariam |
Since its initial public offering in late 1995, MSC Industrial Direct has increased its top line at an impressive 11% compound annual growth rate. Over the past 25 years, MSC has become one of the largest industrial distributors in U.S., and it is especially well known in the metalworking industry, where we estimate the firm enjoys approximately 10% market share. MSC has historically been a conservatively capitalized company, but it is not afraid to flex its balance sheet when the right opportunity presents itself. The company spent $900 million to acquire J&L Industrial Supply in 2006 and Barnes Distribution North America in 2013, which bolstered its metalworking and inventory management products and services. In our view, these acquisitions were prudent uses of capital that improved MSC’s competitive standing.