White Cap Continues Buying Spree

Continuing its acquisition spree, contractor-supply retailer White Cap Industries Inc. said Monday it has agreed to buy Junior’s Tools, whose stores specialize in power tools.

White Cap, based in Costa Mesa, operates warehouse stores that sell tools and building materials to contractors. It will issue stock to pay for Santa Ana-based Junior’s Tools.

White Cap Chairman Greg Grosch declined to disclose financial terms of the deal. It is the ninth acquisition for White Cap since January 1997.

Junior’s Tools’ majority shareholder, Mark Skolnick, who started the company in 1985 out of the back of a pickup, will continue to run his business as a separate division of White Cap.

Junior’s Tools has 12 stores in California, Arizona and Nevada, offering tools to customers ranging from do-it-yourselfers to small- and medium-sized contractors. It had 1997 sales of $24.3 million

White Cap, founded in 1976, went public with a $71.5 million stock offering in October. It had grown to a 35-store chain operating in six Western states before the Junior’s Tools deal, largely through a series of acquisitions.

Through the first nine months of its current fiscal year, White Cap had $136 million in sales, up from $70 million a year earlier.

Skolnick and Grosch said opening new contractor-supply stores is difficult because it takes a long time for employees to develop strong relationships with customers. Buying chains like Junior’s Tools, which is known for excellent customer service, is a better way to grow, Grosch said.

White Cap continues to scout for acquisitions in the Western United States. In Nasdaq trading Monday, White Cap shares lost 6 cents, to $18.94.