The distributor of maintenance, repair and operations products says it will be better able to concentrate on its “key businesses and geographies” by divesting its Grainger China and Netherlands-based Fabory businesses. Above: Grainger's headquarters in Lake Forest, Illinois.

W.W. Grainger Inc.—already a prominent distributor of maintenance, repair and operations (MRO) products in the United States, where it claims a 6% and growing share of a highly fragmented market—is taking steps to shore up its market position even more by shedding two of its overseas operations.

The Lake Forest, Illinois-based company—which does more than half of its annual $11.5 billion in sales through electronic commerce—this week said it has “entered into a definitive agreement” to sell Grainger China LLC, its China-based distribution business, to venture capital firm Sinovation Partners and a business owned by the Grainger China management team. The parties did not mention a targeted selling price.

“This divestiture will better enable Grainger to focus on its key business and geographies,” Grainger said in a prepared statement. Grainger said the deal is expected to close later this year. Grainger doesn’t break out revenue for Grainger China, but Grainger chairman and CEO D.G. Macpherson said in a press release that the Grainger China team did “a remarkable job to drive profitable growth over the years.”

Divesting Fabory in Benelux

The Grainger China announcement follows Grainger’s notice earlier this month that it had entered a definitive agreement to sell Fabory Group, a Netherlands-based industrial products distributor serving the Benelux region, to Torqx Capital Partners, a Dutch private equity firm. The companies said the deal is expected to close later this year but did not comment on a potential selling price.

Fabory, which Grainger acquired in 2011 for about $344 million, has annual revenue of more than 220 million euros (US$248 million) and more than 60,000 customers, according to a statement released by Torqx. Fabory offers more than 400,000 products, including 120,000 in stock, and handles more than 7.5 million orders per year, including transactions on its ecommerce site at Fabory.com, Torqx says.

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Harmen Geerts, managing partner of Torqx, said Torqx will help Fabory “strengthen its position as a leading fastener specialist in its core markets and achieve its full potential.”

Macpherson said Grainger will continue to serve the European market through its Zoro unit and its U.K.-based Cromwell Group, which operates business and industrial products ecommerce sites Cromwell.co.uk and Cromwell-industrial.co.uk and a network of physical branches.

Keeping China connections for private labels

“I want to thank the Fabory team for their innovative and customer-focused approach,” Macpherson said.  “I’m confident the acquisition by Torqx will better align with Fabory’s growth objectives.”

In China, Grainger says it will maintain its global sourcing operations there, which provides the company with private-label products in such categories as safety, cleaning, electrical, motors and tools.

For its most recently reported financial period, the first quarter ended March 31, Grainger reported a 7.2% year-over-year increase in total sales to $3.001 billion, as total ecommerce sales—including ecommerce sites, internet-connected vending machines, e-procurement and EDI—increased 8.7% to about $2.3 billion.

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