DXP Enterprises, Inc. Announces Results of Arbitration With ITT Goulds Pump
September 24 2015 - 05:57PM
Business Wire
DXP Enterprises, Inc. (NASDAQ: DXPE) today announced that
the final outcome regarding arbitration with ITT Goulds has been
delivered after almost two years of back and forth and final
arbiter deliberation. DXP and ITT Goulds have distributor
agreements stemming from DXP’s acquisition history including RA
Mueller, Quadna, Austin & Denholm, Alaska Pump and SEPCO. As a
result of arbitration, we have been served notice to terminate our
agreements with ITT Goulds which provides for a maximum of 180
days, depending upon the agreement, to create an orderly
transition. DXP is committed to make this transition as seamless
and orderly as possible for our customers, employees and
shareholders.
DXP has been a loyal distributor and partner with Goulds for
over 30 years. During DXP’s history with Goulds, DXP grew to be the
largest distributor within the Goulds network, having significantly
grown their market share over the years, growing purchases from
approximately $3 million in 1986 to over $60 million in 2013. DXP’s
relationship has focused on helping Goulds serve customers in the
oil and gas, mining, chemical, food & beverage and general
industrial markets. In 2012 alone, DXP increased Goulds business
over 40%. As a partner, DXP was happy to grow together as long as
we were listening to and meeting customer needs. This created a
win-win for our customers, suppliers and shareholders as we met our
respective goals. With this decision, Goulds has decided to cancel
their largest customer. The Goulds’ relationship has been one of
DXP’s longest standing partnerships and brings to an end a
successful partnership.
David Little, Chief Executive Officer, stated, “While we have
derived value from our relationship over the past 30 years, DXP is
well positioned today to continue our growth strategy, becoming the
one stop solution for customers' rotating equipment needs. Anytime
we review our distribution agreements we take a disciplined
approach hoping to create a win-win for our customers, employees,
supplier partners and shareholders. At this juncture, the result of
the arbitration with ITT Goulds was one-sided and we are excited to
move forward for our customers' and employees' benefit. This
resolution increases our flexibility to grow profitably as we
continue to focus on meeting customer needs, delivering strong
performance and sustainable economic value for our customers,
employees and shareholders.”
ITT Goulds prevailed in the arbitration on a small violation of
the distributor agreement regarding DXP’s acquisition of B27 and a
disagreement regarding whether Goulds agreed to take API products
off the distributor agreements. With DXP’s relationship with Goulds
deteriorating and DXP’s focus on meeting customer needs in the
balance, DXP proactively decided to acquire B27 in 2014 after
several efforts and attempts to remedy the friction in the
relationship.
DXP is excited to move forward creating the best solution for
our customers on delivery, aftermarket service, quality of product
and competitive pricing. As DXP moves forward, we are excited to
work with suppliers like Grundfos, IDEX, John Crane, National
Oilwell Varco, Pentair, PSG, PumpWorks and Xylem, to name a
few.
Paul Twaddell, Vice President, Global Sales and Marketing for
PSG stated, “By focusing on the customer, PSG and DXP have supplied
quality pump solutions supported by strong service capabilities for
many years. We look forward to building on our combined success for
years to come.”
For almost three years, Goulds’ leadership made it clear that
Goulds would cancel DXP’s distributor agreement unless we provided
Goulds with a large number of DXP’s oil and gas and industrial
accounts to be serviced directly by Goulds. DXP hoped to reconcile
these differences but ultimately ended in arbitration.
As a result of DXP’s and Goulds’ back and forth, DXP is prepared
to replace all of Goulds’ products with existing manufacturers, new
manufacturers and a high quality private label offering. DXP is
excited to move forward with all of its supplier partners.
Finally, DXP is a value added distribution company that brings
expertise and total cost savings to the industrial customer. DXP
is, and always will be, a customer driven growth company. DXP is
looking forward to bringing expertise, quality, speed and a total
solution to the customers' rotating equipment needs.
Welcome to the new, fast and free - - DXP Rotating Equipment
Division.
DXP welcomes all calls from all our existing and new customers
on how we can continue and better serve their needs.
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, Dubai
and Mexico. 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, cutting tools, 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. For more information, review the Company’s filings with
the Securities and Exchange Commission.
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version on businesswire.com: http://www.businesswire.com/news/home/20150924006532/en/
DXP Enterprises, Inc.Mac McConnell, 713-996-4700Senior Vice
President, Finance & CFOwww.dxpe.com
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