Supply America bust
In a letter to Supply House Times, Thompson attributed the venture's demise mostly to the stock markets' lack of interest in distribution, as well as "the failure of other consolidators to deliver their promised results."
Faced with the indifference of the public-equity market, Thompson and Chief Executive Officer Michael Mussog decided to look into private equity for the planned merger of Supply America's first founding companies: Coburn Supply, Beaumont, Texas; D&C Plumbing & Heating Supply, Ann Arbor, Mich.; Davis & Warshow, Maspeth, N.Y.; and Kelly's Pipe & Supply, Las Vegas, as well as four other firms that had expressed interest.
However, Mussog said, turning to private equity changed the game. Because of the amount of money needed - $100 million - all agreements would have had to be renegotiated, most likely involving changes that he, Thompson and the other companies involved could not have agreed to.
"While a path through the private equity sector offered a bridge to the public offering, it was not the route that some of our companies desired," Thompson agreed.
Don Maloney, president of Coburn Supply, maintained that the concept behind Supply America was good, and the group would have succeeded if its timing had been better.
"The mood of the financial community was that consolidators were not held in high regard," Maloney said. "If we'd been a little faster and a little earlier, things might have worked out better."
Dave Morrison of D&C Plumbing & Heating Supply echoed those thoughts and emphasized that all of the companies involved were eager to work together.
"If we could do it over again, we would. I think that's true for everybody in the group," he said. "The concept was good. We should have done everything more quickly. If we could have gotten everything done on the original timetable, it would have gone."