- Leading provider focused on serving the municipal and industrial water and wastewater treatment markets
- Continues to accelerate end market transformation and diversification
- Attractive margins and cash flow
DXP Enterprises, Inc. (NASDAQ: DXPE) today announced that it has completed the acquisition of Sullivan Environmental Technologies, Inc. (“Sullivan”).
Sullivan is a leading distributor and manufacturers representative of pumps, valves, controls, and process equipment focused on serving the municipal and industrial water and wastewater industry in the states of Ohio, Kentucky, and Indiana. Financial terms of the transaction were not disclosed. Signing of the definitive agreement occurred on September 1, 2022. Sales and adjusted EBITDA for the last twelve months ending July 31, 2022, were approximately $4.4 million and $1.6 million, respectively. Adjusted EBITDA was calculated as income before tax, plus interest, depreciation and amortization, plus non-recurring items that will not continue after the acquisition.
David R. Little, Chairman and CEO commented, “We are pleased to welcome the Sullivan employees to the DXP team. Sullivan is a unique, well-run business focused on providing equipment and services to customers in the municipal and industrial water and wastewater market. We have had a successful year in scaling our water and wastewater efforts via acquisition and we look forward to Sullivan adding to an already growing and successful end market for DXP. Sullivan as well as DXP, continue to perform in today’s dynamic market and we look forward to their contribution in DXP’s third quarter. Sullivan provides DXP with exceptional sales expertise that will enhance our efforts and our ability to collaborate and serve our customers. Sullivan is another great addition that will enhance DXP’s end market mix, margins, and cash flow profile.”
This is the fourth acquisition in 2022 for DXP Enterprises and the eleventh acquisition since the fourth quarter of 2020, as DXP continues to expand its offering within the water and wastewater markets.
Kent Yee, CFO, added, “We have executed on our strategic priorities to transform and diversify DXP via acquisitions into markets and business models where we can continue to enhance DXP. Today, DXP’s oil & gas exposure is less than twenty-eight percent and that is because we have started to scale different end markets like water and wastewater. We are having a successful year rebounding and growing through acquisition. Sullivan is another example of DXP adding experienced, technical sales teams that complements previous acquisitions. The Sullivan team is another great addition to DXP and our water and wastewater portfolio. Sullivan has a talented team that shares our passion for providing quality products, exceptional service, and superior value to our customers. We continue to see strength at Sullivan and across DXP and look forward to expounding more during our third quarter earnings call.”
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 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. These forward-looking statements include without limitation those about the Company’s expectations regarding the impact of low commodity prices of oil and gas; the Company's expectations regarding the filing of the Form 10-Q; the description of the anticipated changes in the Company's consolidated balance sheet and the results of operations and the Company's assessment of the impact of such anticipated changes; the Company’s business, the Company’s future profitability, cash flow, liquidity, and growth. 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; decreases in oil and natural gas prices; decreases in oil and natural gas industry expenditure levels, which may result from decreased oil and natural gas prices or other factors; inability of the Company or its independent auditors to complete the work necessary in order to file the Form 10-Q, in the expected time frame; unanticipated changes to the Company's operating results in the Form 10-Q as filed or in relation to prior periods, including as compared to the anticipated changes stated here; unanticipated impact of such changes and its materiality; ability to obtain needed capital, dependence on existing management, leverage and debt service, domestic or global economic conditions, economic risks related to the impact of COVID-19, ability to manage changes and the continued health or availability of management personnel 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. More information on these risks and other potential factors that could affect the Company’s business and financial results is included in the Company’s filings with the SEC, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.
Kent Yee (713) 996-4700
Senior Vice President, CFO