Lab Safety Supply Buys Highsmith

Highsmith, a direct marketer of supplies, furniture and equipment to public and school libraries throughout the U.S., was bought by Lab Safety Supply. Terms of the deal were not disclosed. But the merger, which will be completed in about six months, is expected to add up to $30 million to Lab Safety Supply’s sales in 2008.

Lab Safety Supply, a division of industrial equipment supplier W.W. Grainger, sells safety and other products to more than 800,000 customers in North America through a variety of branded catalogs, flyers and Websites targeted to specific niche markets. Highsmith, which has annual sales of more than $50 million, sells over 25,000 products through more than a dozen specialty catalogs, including the 754-page Library & School Products catalog.

Grainger spokesperson Robb Kristopher says the deal represents the continued broadening of Lab Safety Supply’s customer base. The acquisition of Highsmith was appealing because “LSS has been historically weighted in manufacturing equipment … and we have been making a conscious effort to diversify away from that,” he says. “This helps further diversify our customer base.”

Kristopher says there are synergies to be gained from the deal in that Lab Safety can now sell both lab safety products and library products into public and private schools concurrently “Obviously, you capture the synergies of the back office–and then you can also do some cross–selling of existing lab catalogs and products into the new customer base,” he says.

No word yet on what will happen to Highsmith’s offices, which are located in Fort Atkinson, WI — not far from Lab Safety’s headquarters in Janesville, WI. But Kristopher says Lab Safety is going to place as many of Highsmith’s approximately 200 employees as possible: “We actually kept positions open [at LSS] in anticipation of this acquisition.”

Stuart Rose, managing director for investment bank Tully & Holland, notes that the purchase of Highsmith marks Lab Safety Supply’s fourth acquisition in just 18 months, and eighth since the start of 2001. “With Highsmith bringing in roughly $62 million in revenue prior to acquisition, this sale marks LSS’s largest acquisition to date.”

Rose says LSS is attempting to leverage assets and gain a new strength. “In this case, it’s leveraging its consumer base as well as existing channels, while gaining a new product line and access to the library,” he explains. “Highsmith’s quality products will be added to Lab Safety Supply’s diversified product line, which already offers consumers over 100,000 different options to choose from.”

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