Brookfield Place, home to the headquarters of Brookfield Asset Management, in New York, May 7, 2025.DAVE SANDERS/The New York Times News Service
The private-equity arm of Brookfield Asset Management Ltd. is paying $1.6-billion to acquire Gregg Distributors LP, a family-owned provider of industrial products to thousands of businesses across Western Canada.
Edmonton-based Gregg was founded in 1968 and sells broad variety of products for maintenance, repair and operations to companies and municipalities that span sectors such as automotive, agriculture, energy and construction.
Gregg’s catalogue includes a diverse array of products such as power tools, hoses, safety equipment, industrial chemicals, first-aid supplies, lighting and automotive parts that are sourced from about 500 suppliers.
That makes it a fit for Brookfield’s private-equity business, which has focused on buyouts of industrial companies and providers of essential services.
Private-equity investors are focusing increasingly on acquiring companies that have physical assets and steady demand as software companies are struggling, faced with potential disruption from makers of artificial intelligence tools.
Brookfield manages more than US$1-trillion of assets in infrastructure, real estate, renewable energy and insurance, as well as its US$75-billion private-equity business. It has also invested in U.S.-based industrial distributors before, including trailer parts manufacturer DexKo Global Inc. and life sciences equipment maker Antylia Scientific.
Gregg’s roster of roughly 20,000 customers includes multiple companies in which Brookfield has previously made investments.
Gregg is currently led by Gary Gregg and the company is controlled by his family, as well as employees who own shares. Brookfield will buy out the Gregg family stake as well as some employee shares to take a controlling stake, though employees will still own part of the business.
The transaction gives Gregg an enterprise value of about $1.6-billion, which includes debt, and is expected to close by the end of the year.
“A big part of why we like the business is these are products that businesses need on a day-to-day basis,” said Brookfield managing partner Erson Olivan, in an interview.
Gregg has a wide-ranging base of industrial clients that include oil field services, construction and trucking companies. Those customers have steady demand for relatively low-cost products “that they just can’t operate without,” which produces reliable revenue and cash flows, Mr. Olivan said.
But Gregg is a business that also periodically benefits from spikes in sales when companies undertake major projects in Alberta, Saskatchewan and B.C., where the company serves most of its base customers.
A renewed focus on energy security in Canada that has spurred new investment in liquefied natural gas facilities and oil pipelines could provide “some tailwinds” for Gregg, Mr. Olivan said.
As the Gregg family exits, Brookfield plans to keep the company’s remaining senior management team in place, with support from the asset manager’s operations team. The roughly 1,000 employees who work at the company are expected to stay on.
Mr. Olivan said Brookfield is not planning to overhaul Gregg’s strategy, and will focus on upgrading the way the company goes to market and boosting its use of data and automation to make improvements at the margins.
“It’s a really good business to begin with,” he said.
Mr. Gregg said in a statement that Brookfield’s operating expertise and knowledge of the Canadian market and familiarity with Gregg’s customer base “make them the ideal partner for Gregg’s next chapter.”