DXP Enterprises, Inc. Announces Acquisition of Kappe Associates, Inc.
DXP Enterprises, Inc. (DXPE) has completed the acquisition of Kappe Associates, Inc., a leading distributor and manufacturers representative of pumps, controls, and process equipment focused on serving the water and wastewater industry. The acquisition will deepen DXP's presence in the Mid-Atlantic region of the U.S. and further scale its National Water & Wastewater efforts. The sales and adjusted EBITDA for Kappe for the last twelve months ending December 31, 2023, were approximately $25.4 million and $3.8 million, respectively. DXP funded the acquisition with cash from the balance sheet, and the transaction is consistent with its growth strategy. The acquisition will provide DXP with exceptional sales expertise and talent to serve its customers better, enhancing its DXP Water platform.
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DXP Enterprises, Inc. has completed the acquisition of Kappe Associates, Inc.
The acquisition will deepen DXP's presence in the Mid-Atlantic region of the U.S. and further scale its National Water & Wastewater efforts
Sales and adjusted EBITDA for Kappe for the last twelve months ending December 31, 2023, were approximately $25.4 million and $3.8 million, respectively
The transaction is consistent with DXP's growth strategy and will provide exceptional sales expertise and talent to serve its customers better
The acquisition of Kappe Associates, Inc. by DXP Enterprises, Inc. represents strategic consolidation within the distribution and manufacturing sector for water and wastewater equipment. This move is indicative of DXP's intent to fortify its presence in the Mid-Atlantic region and enhance its national water and wastewater efforts. The acquisition is financed through cash reserves, which suggests a strong liquidity position for DXP.
From a market perspective, the integration of Kappe's operations, which reported $25.4 million in sales and $3.8 million in adjusted EBITDA , is likely to bolster DXP's revenue streams and profitability margins. The mention of 'Attractive Margins and Cash Flow' indicates that Kappe's business model aligns well with DXP's financial health and operational efficiency. This move could potentially create shareholder value and enhance competitive advantage in the niche market of water and wastewater solutions.
DXP's acquisition of Kappe Associates is financially significant, with Kappe's adjusted EBITDA standing at $3.8 million. The financial metric of EBITDA, which stands for Earnings Before Interest, Taxes, Depreciation and Amortization, is a widely used indicator of a company's operational profitability. Adjusted EBITDA further excludes non-recurring items, providing a clearer picture of ongoing business performance.
Investors should note the strategic nature of this acquisition, as it is the tenth under DXP's Water efforts, signifying a targeted growth strategy in the water and wastewater sector. The transaction is expected to be accretive, meaning it should increase DXP's earnings per share, which is an important consideration for stockholders assessing the impact on their investments.
The water and wastewater industry is critical for infrastructure and public health and companies like DXP and Kappe play a vital role in providing necessary equipment and services. The acquisition deepens DXP's technical expertise and market reach, especially considering Kappe's established presence since 1946. The mention of Kappe's 'youthful energy' suggests an infusion of innovation and potentially new technology into DXP's offerings.
Furthermore, the acquisition's timing, at the start of the year, is likely a strategic move to capitalize on the annual budget cycles of municipalities and other entities that operate in the water and wastewater sector. This could lead to immediate synergies and sales opportunities for the combined entity.
02/05/2024 - 08:00 AM
Furthers and continues to scale DXP’s National Water & Wastewater efforts
Deepens presence in the Mid-Atlantic region of the U.S.
Attractive Margins and Cash Flow
HOUSTON --(BUSINESS WIRE)--
DXP Enterprises, Inc. (NASDAQ: DXPE) today announced that it has completed the acquisition of Kappe Associates, Inc. (“Kappe”). Founded in 1946, Kappe is headquartered in Frederick, Maryland and operates out of three locations servicing Maryland , the District of Columbia , Delaware, Virginia , Pennsylvania , Southern New Jersey , and West Virginia .
Kappe is a leading distributor and manufacturers representative of pumps, controls and process equipment focused on serving the water and wastewater industry. DXP funded the acquisition with cash from the balance sheet.
“We are pleased to announce the acquisition of Kappe and start the year with great additions to our water and wastewater growth efforts. We are excited to have Kappe and Hennesy join our DXP family. Each company provides DXP with exceptional sales expertise that will enhance our efforts and ability to collaborate and serve our customers and grow our DXP Water platform. These acquisitions are consistent with our growth strategy and demonstrate our commitment to expanding DXP into the water and wastewater treatment markets as well as maintaining our leading position as the largest distributor of rotating equipment in North America,” commented David Little, Chairman, and Chief Executive Officer of DXP.
The signing of the definitive agreement occurred on February 1, 2024. Sales and adjusted EBITDA for Kappe for the last twelve months ending December 31, 2023, were approximately $25.4 million $3.8 million
"Kappe’s expertise and youthful energy in the water and wastewater markets 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 also gives us notable talent as we continue to find resources to serve our customers better," added David Little.
Kent Yee, Chief Financial Officer, stated "We are very excited to welcome Kappe’s talented and hardworking employees to the DXP team. We continue to execute on our strategic priorities and strategy of making acquisitions in markets and business models where we can continue to enhance DXP. Kappe complements our recent focus on water and wastewater acquisitions and provides us with platforms in their respective markets to effectively serve the water and wastewater customer needs and completes our tenth acquisition under our DXP Water efforts. This transaction will be positive for Kappe and DXP’s customers, employees, and shareholders."
About DXP Enterprises, Inc.
DXP Enterprises, Inc. is a leading products and service distributor that adds value and total cost savings solutions to industrial customers throughout the United States , Canada , Mexico , and Dubai . DXP provides innovative pumping solutions, supply chain services and maintenance, repair, operating and production ("MROP") services that emphasize and utilize DXP’s vast product knowledge and technical expertise in rotating equipment, bearings, power transmission, metal working, industrial supplies and safety products and services. DXP's breadth of MROP products and service solutions allows DXP to be flexible and customer-driven, creating competitive advantages for our customers. DXP’s business segments include Service Centers, Innovative Pumping Solutions and Supply Chain Services. For more information, go to www.dxpe.com .
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made by or to be made by the Company) contains statements that are forward-looking. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future; and accordingly, such results may differ from those expressed in any forward-looking statement made by or on behalf of the Company. These risks and uncertainties include but are not limited to; ability to obtain needed capital, dependence on existing management, leverage, and debt service, domestic or global economic conditions, and changes in customer preferences and attitudes. In some cases, you can identify forward-looking statements by terminology such as, but not limited to, “may,” “will,” “should,” “intend,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “goal,” or “continue” or the negative of such terms or other comparable terminology. For more information, review the Company’s filings with the Securities and Exchange Commission.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240205202370/en/
Kent Yee
www.dxpe.com
Source: DXP Enterprises, Inc.
What is the ticker symbol for DXP Enterprises, Inc.?
The ticker symbol for DXP Enterprises, Inc. is DXPE.
What is the name of the company DXP Enterprises, Inc. acquired?
DXP Enterprises, Inc. has completed the acquisition of Kappe Associates, Inc.
What were the sales and adjusted EBITDA for Kappe for the last twelve months ending December 31, 2023?
The sales and adjusted EBITDA for Kappe for the last twelve months ending December 31, 2023, were approximately $25.4 million and $3.8 million, respectively
How was the acquisition of Kappe funded?
DXP funded the acquisition with cash from the balance sheet.
Where is Kappe Associates, Inc. headquartered?
Kappe Associates, Inc. is headquartered in Frederick, Maryland.
What industry does Kappe Associates, Inc. focus on?
Kappe Associates, Inc. is focused on serving the water and wastewater industry as a leading distributor and manufacturers representative of pumps, controls, and process equipment.
What does the acquisition of Kappe provide DXP Enterprises, Inc. with?
The acquisition will provide DXP with exceptional sales expertise and talent to serve its customers better, enhancing its DXP Water platform.
