Brazos Sells ORS Nasco

Brazos Private Equity Partners has completed its sale of ORS Nasco Inc. to United Stationers Supply Co. (Nasdaq: USTR) for approximately $180 million in cash. ORS Nasco is a Muskogee, Okla.-based wholesale distributor of branded and private-label products and services to industrial customers. It was acquired by Brazos in December 2005.

 

PRESS RELEASE

United Stationers Inc. (NASDAQ: USTR) announced today that its wholly owned subsidiary, United Stationers Supply Co., has completed the purchase of 100% of the outstanding shares of ORS Nasco Holding, Inc. (ORS Nasco) from an affiliate of Brazos Private Equity Partners, LLC of Dallas, Texas, and other shareholders. ORS Nasco is a pure wholesale distributor of industrial supplies, with annual sales of approximately $285 million. The company sells exclusively to independent distributors, offering them about 200,000 premium branded and private label products from over 600 manufacturers. ORS Nasco sells to more than 10,000 independent distributors in multiple channels, including industrial, MRO (maintenance, repair and operations), safety, construction, welding, and oilfield services. It serves a very diverse customer base through eight distribution centers strategically located across the U.S., and is headquartered in Muskogee, Oklahoma.

The transaction is expected to be accretive to United's earnings beginning in 2008. The all-cash purchase price was approximately $178 million plus $6.5 million related primarily to future tax benefits to United as a result of ORS Nasco stock options being exercised. The purchase price multiple was approximately 8.5-times trailing 12 months' EBITDA. The acquisition was financed through the addition of a $200 million term loan under the accordion feature of United's existing credit agreement.

Acquisition Provides Entry into Wholesale Industrial Supplies Market

Richard W. Gochnauer, president and chief executive officer of United Stationers, said ORS Nasco diversifies our product and customer base into the estimated $22 billion wholesale industrial supplies market with solid growth and good margins. The acquisition expands our product line for United's customers in the important category of safety and security, and significantly extends ORS Nasco's product and service capabilities for its customers. It also offers us excellent opportunities for strong synergies. For instance, there are a great many similarities between ORS Nasco and our Lagasse business. Lagasse's sales have grown from approximately $80 million to nearly $1 billion over the last 10 years, with its janitorial and breakroom product line representing our fastest growing category. We believe that ORS Nasco provides a similar platform for profitable growth. Combining our expertise in logistics and marketing will help ORS Nasco become an even more valuable partner with its customers and suppliers. As a result, we expect this acquisition will help us deliver the long-term value and profitable growth that our shareholders deserve.

“One very important element that we recognized early in the process was that our companies share a common culture,” continued Gochnauer. “ORS Nasco has a passion for supporting the success of its distributor customers through a pure wholesale model that is at the center of the company's strategies. We believe that this transaction is an excellent strategic fit for both companies.”

Company Overview

United Stationers Inc. is North America's largest broad line wholesale distributor of business products, with net sales for 2006 of $4.5 billion. The company's network of 62 distribution centers allows it to offer nearly 46,000 items to its approximately 20,000 reseller customers. This network, combined with United's depth and breadth of inventory in technology products, traditional business products, office furniture, janitorial and breakroom products, and foodservice consumables, enables the company to ship products overnight to more than 90% of the U.S. and major cities in Mexico. United's focus on fulfillment excellence has given it an average line fill rate of better than 97%, a 99.5% order accuracy rate, and a 99% on-time delivery rate. For more information, visit www.unitedstationers.com.

ORS Nasco is a pure wholesale distributor of industrial supplies, with annual sales of approximately $285 million. The company sells exclusively to independent distributors from eight distribution centers strategically located across the U.S. ORS Nasco offers about 200,000 premium branded and private label products from over 600 manufacturers. ORS Nasco sells to more than 10,000 independent distributors in multiple channels, including industrial, MRO (maintenance, repair and operations), safety, construction, welding, and oilfield services.

United Stationers' common stock trades on the NASDAQ Global Select Market under the symbol USTR.