HOUSTON--(BUSINESS WIRE)--DXP Enterprises, Inc. (NASDAQ: DXPE) today announced the completion of the acquisition of Alliance Pump & Mechanical Service, Inc (“Alliance”), a leading municipal and industrial pump sales, service, and repair company. DXP funded the acquisition with cash on the balance sheet.
Alliance is headquartered, and operates out of a single location in Independence, Missouri. Alliance is focused on serving customers in the chemical, water/wastewater, municipal, and general industrial markets with approximately 9 employees. Financial terms of the transaction were not disclosed. Signing of the definitive agreement occurred on November 1, 2023. Sales and adjusted EBITDA were approximately $2 million and $230 thousand, respectively. Adjusted EBITDA was calculated as income before tax, plus interest, depreciation and amortization, and non-recurring items that will not continue after the completion of the acquisition.
David R. Little, Chairman, and Chief Executive Officer remarked, “We are pleased to welcome the Alliance employees to the DXP team. Alliance is a unique, well-run business focused on providing value-added service and repair capabilities to its customers. Alliance will provide DXP with additional geographic territory and enhanced end market mix. Alliance is a great company with key differentiators and provides us with high caliber people.”
Kent Yee, Chief Financial Officer added, “We are excited to welcome the talented and hardworking employees of Alliance to the DXP team. Alliance is our third acquisition this year and is another exciting addition to DXP. Alliance provides us with a strong pump repair facility in our North Central Region and complements our 2012 acquisition of Pump & Power with a focus on municipal or water and wastewater. Alliance complements and diversifies DXP’s products and services and end market exposure. This transaction will be positive for Alliance and DXP’s customers, employees, and shareholders.”
Non-GAAP Financial Measures
DXP supplements reporting of net income with non-GAAP measurements, including EBITDA, Adjusted EBITDA, and free cash flow. This supplemental information should not be considered in isolation or as a substitute for the unaudited GAAP measurements. Additional information regarding EBITDA referred to in this press release is included below under "--Unaudited Reconciliation of Non-GAAP Financial Information."
The Company believes EBITDA provides additional information about: (i) operating performance, because it assists in comparing the operating performance of the business, as it removes the impact of non-cash depreciation and amortization expense as well as items not directly resulting from core operations such as interest expense and income taxes and (ii) the performance and the effectiveness of operational strategies. Additionally, EBITDA performance is a component of a measure of the Company’s financial covenants under its credit facility. Furthermore, some investors use EBITDA as a supplemental measure to evaluate the overall operating performance of companies in the industry. Management believes that some investors’ understanding of performance is enhanced by including this non-GAAP financial measure as a reasonable basis for comparing ongoing results of operations. By providing this non-GAAP financial measure, together with a reconciliation from net income, the Company believes it is enhancing investors’ understanding of the business and results of operations, as well as assisting investors in evaluating how well the Company is executing strategic initiatives.
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.
