Industry Consolidation Heats Up

Gauging GAWDA members’ sentiments on increasing acquisition activity

Industry Consolidation Heats UpIs the gases and welding industry broken? More than one industry leader has referred to the industry as “fragmented” in recent memory, suggesting perhaps that customers would be better served by a smaller, but more unified group of suppliers.

If recent M&A activity is any indication, the industry may be headed in this direction. Let’s take a look at the numbers.

Going back to First Quarter 2012, 23 industry acquisitions have been announced in Welding & Gases Today magazine and the GAWDA Connection newsletter. Of these 23 acquisitions, 19 were made by distributors. Several more acquisitions, some involving GAWDA members, have not been publicly announced.

Airgas noted in the company’s Fourth Quarter 2012 earnings release that it acquired eight businesses during its Fiscal 2012. Only three—Pain Enterprises, ABCO Gases and Nordan Smith—are named in company press releases.

Despite its unannounced acquisitions, Airgas has been very public about its growth strategy. In the Third Quarter 2012 earnings call in January 2012, CEO Peter McCausland stated, “We expect opportunities to continue to consolidate the fragmented U.S. package gas industry, and those opportunities should increase noticeably in the next 12 to 18 months.” He followed up this statement in May 2012 during the Fourth Quarter 2012 earnings call by noting that Airgas’ acquisition pipeline continues to improve. “I’m optimistic we’ll achieve our annual target of $150 million in acquired sales during fiscal 2013,” said McCausland.

CI Capital Partners, parent company of Tech Air (Danbury, CT), has echoed a similar sentiment to McCausland. In announcing the company’s merger with Corp Brothers, Joost Thesseling, managing director at CI Capital Partners, said “We continue to see attractive opportunities in the large and fragmented U.S. packaged gas market.”

With the recent trend of increasing mergers and acquisitions, Welding & Gases Today wants to know how GAWDA members feel about consolidation in the gases and welding industry. Like it? Don’t like it? Let us know your thoughts by responding to this brief survey*.

*Editor’s Note: The industry consolidation survey is now closed. You can view the results of the survey in the following three-part series:

Examining Industry Consolidation

Gases and Welding Distributors Association