The pandemic has accelerated demand for certain products in a number of sectors. Another one to look at is trucking parts. Supply chain disruptions made it harder to find parts during the peak of Covid, resulting in fleets aging longer. The aftermath is resulting in distributors of truck parts coming into play, according to one private equity investor.
“The continued aging of the truck parc, which has been exacerbated by Covid-19, and projected growth in vehicle miles driven for heavy duty trucks will combine to drive demand for aftermarket parts,” Steve Miller, managing director, private equity–North America at Investcorp, tells Mergers & Acquisitions. A “truck parc” refers to the existing installed parts on trucks on the road. The latter got older with fleets during the height of Covid because supply chain shortages made it harder to buy new trucks.
Investcorp recently acquired S&S Truck Parts, an independent distributor of private label and branded aftermarket truck parts. S&S serves over 1,600 customers including original equipment manufacturers (OEMs), OE dealerships, independent warehouse distributors and service shops mainly across North America. Investcorp manages about $40 billion in assets.
There is no single solution in sight to fix the supply chain problems anytime soon, and whenever there is an industrywide problem, it creates business opportunities, and those businesses will always attract buyers. “We will pursue strategic M&A opportunities where we believe it will enable us to offer additional products and services,” says Miller.
– Demitri Diakantonis