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 and $3.8 million, respectively. Adjusted EBITDA was calculated as income before tax, plus interest, plus depreciation and amortization, plus non-recurring items.
"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.
