TOWSON, Md.—Dunleary Inc., a super-regional specialty chemical distribution company based in Towson, is acquiring two chemical distribution firms, bringing together multiple chemical markets under one roof.
Dunleary has agreed to buy D.N. Lukens Inc. of Westborough, Mass., and D & F Distributing Inc. of Dallas, with a closing expected near the end of August. Terms of the deal weren't disclosed.
The combination will create a new entity, currently listed as Dunleary L.L.C., that will roll out a new brand identity later this fall, Dunleary CEO David Behan said. Combined, the companies cover chemical markets including coatings, adhesives, sealants, elastomers, plastics, construction, food, personal care, cosmetics, graphic arts, oil and gas, rubber and textiles.
The territories for the companies don't overlap much, but those in ownership at each have known one another for more than 20 years, Behan said.
"So as we watched the market evolve and saw how things were playing out over time, we've talked over the years about potentially doing something together one day. And then one day became July 12," Behan said.
As company leadership watched the markets, the move looked more beneficial as the industry has followed a general trend toward consolidation over the last 15 years. As the number of distributors has gone down, suppliers have relied more on super-regional and multi-super-regional companies to step up and handle orders for a third to half the country, he said.
Also, bringing the companies together creates new economies of scale from client to employee, keeping technical and marketing talents together under a slightly larger roof. It allows the company to use its scale to accomplish goals like spending more on new investments. That will allow the new company to focus on the salespeople in the field, strengthening its presence in each of its geographies across 28 states, Behan said.
Dunleary said the combined firm will attend to 4,400 current and potential customers.
"Our goal is not necessarily to become a national company, but to be a very strong presence in each of our markets," he said. "To remain a viable distribution entity, I do think offering more geographical scope is appealing to the supplier base. I'd say the consolidation trend is certainly pushing that."
Besides already being on friendly terms with D.N. Lukens and D & F Distributing, another important part was finding partners that already had a strong sales presence similar to Dunleary's, Behan said.