DXP Enterprises acquires Arroyo Process Equipment

HOUSTON - DXP Enterprises , Inc. (NASDAQ: NASDAQ:DXPE), a leading distributor of industrial products and services, has completed the acquisition of Arroyo Process Equipment, a prominent distributor of pumps and process equipment. This acquisition, which was funded through DXP’s cash reserves, marks a significant expansion of the company’s rotating equipment platform and establishes a substantial presence in the Florida market. The move comes as DXP demonstrates strong financial health, with InvestingPro data showing a remarkable 223% return over the past year and healthy liquidity with current assets more than twice its short-term obligations.

Arroyo, which was founded in 1968 and operates from three locations across Florida, specializes in serving various industrial sectors, including asphalt, mining, industrial water, and chemicals. The company’s last twelve months’ sales leading up to December 31, 2024, amounted to approximately $26.3 million, with an adjusted EBITDA of $1.3 million. This acquisition adds to DXP’s existing revenue base of $1.74 billion and consolidated EBITDA of $169.7 million. According to InvestingPro analysis, which offers comprehensive insights through its Pro Research Reports covering over 1,400 US stocks, DXP currently trades above its Fair Value, reflecting strong investor confidence in its growth strategy.

David Little, the Chairman and CEO of DXP, expressed his enthusiasm about the acquisition, stating that Arroyo’s sales expertise and leadership in Florida will enhance DXP’s service capabilities and collaborative efforts with customers. He also highlighted the alignment with DXP’s vision to be the leading North American rotating equipment company.

Kent Yee, the CFO of DXP, echoed Little’s sentiments, welcoming Arroyo’s employees to the team and emphasizing the strategic importance of the acquisition in diversifying DXP’s end markets and strengthening its market position in Florida. He noted that the transaction promises positive outcomes for customers, employees, and shareholders of both DXP and Arroyo.

The signing of the definitive agreement took place on January 31, 2025. DXP Enterprises, Inc. continues to focus on providing innovative solutions and services across its business segments, which include Service Centers, Innovative Pumping Solutions, and Supply Chain Services. With this acquisition, DXP reaffirms its commitment to growth and market diversification.

This expansion is part of DXP’s ongoing strategy to enhance its service offerings through strategic acquisitions in key markets. The integration of Arroyo’s expertise is expected to complement DXP’s existing product and service portfolio, providing a broader range of solutions to its client base. With a P/E ratio of 24.9 and strong momentum indicators, DXP shows promising growth potential. Investors seeking deeper insights into DXP’s valuation and growth metrics can access detailed analysis through InvestingPro, which features 12 additional key investment tips for this stock.

Information regarding this acquisition is based on a press release statement issued by DXP Enterprises, Inc.

In other recent news, DXP Enterprises reported a strong third quarter in the fiscal year 2024, with total sales increasing by 12.8% to $472.9 million. The company’s Innovative Pumping Solutions (IPS) segment saw a significant rise in sales by 52.3%. Earnings per diluted share also improved to $1.27 from $0.93 in the same quarter of the previous year. DXP Enterprises’ acquisition strategy has been successful with seven acquisitions completed year-to-date and plans to close two more by the end of the first quarter of 2025. The company is expecting continued growth in the energy and water markets. These are recent developments and part of the company’s strategic focus on high-growth areas. The company’s CFO, Kent Yee, emphasized the ongoing execution of the company’s acquisition strategy, while CEO David Little expressed confidence in outgrowing the market.

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