Distribution M&A Advisory | Strategic Sell-Side Representation for Canadian Distribution Companies

Institutional M&A Advisory for Canada’s Distribution and Supply Chain Sector

Windsor Drake is a Canadian mergers and acquisitions advisory firm providing sell-side representation to owners of distribution companies across industrial, commercial, and consumer categories. We bring institutional-grade process, buyer access, and negotiation rigor to founders, families, and financial sponsors seeking to exit, recapitalize, or scale through a strategic transaction.

Our engagements are discreet, disciplined, and led by senior professionals with deep experience in logistics, supply chain, and industrial services. Whether you operate a regional wholesaler, a specialty distributor, or a national B2B fulfillment network, Windsor Drake runs tailored processes that reflect your business’s value, structure, and market position.

Why Distribution M&A Activity Is Rising in Canada

Distribution companies in Canada are experiencing a surge in M&A activity due to structural shifts in global and domestic supply chains. Key drivers include:

  • Supply chain resilience initiatives post-COVID

  • Digitization of inventory and fulfillment systems

  • Consolidation of fragmented regional players

  • Rise of private-label, value-added, and niche B2B distributors

  • Cross-border expansion into the Canadian market by U.S. and European buyers

According to Statistics Canada (https://www.statcan.gc.ca/) and global logistics intelligence sources, Canadian distributors that can offer scale, specialized product knowledge, or last-mile efficiency are commanding premium valuations.

What Is Distribution M&A?

Distribution M&A refers to the sale, merger, or recapitalization of businesses that:

  • Buy and resell products through wholesale or dealer networks

  • Provide third-party or value-added logistics services

  • Operate as channel partners between manufacturers and end users

  • Fulfill specialty, industrial, or consumer product demand with speed, accuracy, and customization

These companies are the backbone of many sectors—from HVAC and building materials to packaging, safety products, pharmaceuticals, and food service.

M&A transactions in this sector require domain expertise in:

  • Inventory turns and SKU productivity

  • Gross margin by product line and customer segment

  • Logistics infrastructure (DCs, warehouses, fleet)

  • Supplier relationships and exclusivity agreements

  • ERP systems, fulfillment accuracy, and backorder rates

Who We Advise

Windsor Drake advises Canadian companies in:

  • Industrial and construction supply distribution

  • Packaging and shipping supplies

  • Foodservice and hospitality product distribution

  • Consumer goods and specialty retail fulfillment

  • Healthcare, pharma, and life sciences distribution

  • Automotive and heavy equipment aftermarket parts

Typical engagement profile:

  • $10M–$200M in annual revenue

  • $2M–$25M in normalized EBITDA

  • Multi-branch or national warehouse footprint

  • Direct and indirect sales channels

  • Stable customer base with multi-year contracts or supply relationships

We advise family-owned, founder-led, and private equity-backed distribution businesses.

Windsor Drake’s Sell-Side M&A Process

1. Strategic Readiness Assessment

We begin with a private strategic review focused on your business’s core drivers, operating model, and shareholder objectives.

Deliverables:

  • EBITDA normalization with gross margin analysis

  • Working capital and inventory cycle evaluation

  • Customer concentration and retention analysis

  • Initial market valuation benchmark

We clarify what kind of buyer will value your company most—and how to attract them.

2. Positioning and Go-to-Market Preparation

We prepare investment-grade marketing materials that speak to both strategic and financial buyers.

Includes:

  • Confidential Information Memorandum (CIM)

  • Normalized financial model including inventory aging and working capital requirements

  • Buyer target list across strategic, sponsor, and cross-border acquirers

  • Preliminary diligence dataroom and compliance documentation

We position your company around core advantages like:

  • Speed, service levels, and geographic reach

  • Value-added services (kitting, private labeling, on-site support)

  • Technology platforms (ERP, warehouse management, order automation)

  • Strategic supplier or customer agreements

3. Discreet Buyer Outreach

We manage an NDA-protected buyer outreach process targeting:

  • Private equity firms active in distribution roll-ups

  • Strategic distributors seeking to enter or expand in Canada

  • International consolidators seeking geographic or vertical reach

  • Industry buyers in adjacent logistics and fulfillment sectors

You remain anonymous until qualified buyers are identified and authorized.

4. Term Sheet Negotiation and Competitive Tension

We solicit, negotiate, and structure LOIs (Letters of Intent) from multiple qualified buyers. We manage competitive dynamics across:

  • Enterprise value and consideration structure

  • Earnouts, rollover equity, and seller financing (if applicable)

  • Working capital targets and net debt adjustments

  • Legal structure (share vs asset) and tax impact

Our team advises on negotiation strategy and manages communication to maintain leverage.

5. Diligence, Closing, and Transition

We coordinate all aspects of diligence:

  • Inventory valuation and obsolescence review

  • Real estate lease or asset transaction terms

  • Supplier and vendor contract assignment

  • Transportation, fleet, and fulfillment infrastructure review

  • ERP systems, cybersecurity, and data integration planning

Our process ensures your team can stay focused on operations while we manage deal logistics.

Valuation Drivers in Distribution M&A

Buyers assess distribution companies based on:

  • Gross margin profile and product mix diversity

  • Turn rates, inventory obsolescence, and shrink

  • EBITDA margin stability and cash conversion

  • Customer retention and account growth trends

  • Operational scalability and fulfillment speed

  • Supplier relationships, rebate agreements, and exclusivity

Typical valuation ranges:

  • 5x–7x EBITDA for general B2B distribution firms

  • 6x–8.5x EBITDA for companies with specialty product focus and margin strength

  • 8x–10x EBITDA+ for national platforms with technology and service differentiation

Premiums are paid for:

  • Long-term supplier relationships or exclusive distribution rights

  • Tech-enabled fulfillment and scalable ERP infrastructure

  • Multi-site footprint with route optimization

  • Recurring supply contracts and vendor-managed inventory (VMI)

Market Trends Driving M&A

  • Private equity firms building vertical-specific distribution platforms (HVAC, PPE, packaging, electrical)

  • Supply chain digitization driving valuation premiums for tech-enabled companies

  • U.S. buyers expanding into Canadian markets for growth and synergy

  • Manufacturers divesting captive distribution arms to focus on core production

  • Green logistics and ESG alignment influencing infrastructure investments

Windsor Drake tracks real-time M&A activity, buyer mandates, and valuation trends across the Canadian and North American distribution sector.

Why Windsor Drake

  • Sector-Specific Insight: We understand distribution economics—inventory, logistics, margin discipline, and customer lock-in

  • Buyer Network Access: Our reach spans active PE groups, strategic acquirers, and infrastructure buyers focused on supply chain

  • Institutional Rigor: Our materials and process mirror those of global investment banks—no shortcuts

  • Confidential & Aligned: We act only for sellers, and run tight, private processes that protect your brand and workforce

Legal and Tax Considerations

Distribution M&A often involves:

  • Asset vs share sale analysis

  • CRA tax strategy, LCGE eligibility, and capital gains planning

  • Working capital mechanisms tied to inventory and receivables

  • Assignment of customer, supplier, and lease agreements

  • Foreign buyer compliance with Investment Canada Act (if applicable)

We work closely with your accounting and legal advisors—or can introduce M&A-specialized counsel and tax professionals. See CRA: https://www.canada.ca/en/revenue-agency/services/tax/businesses.html

FAQs

Can I sell part of my business and keep some equity?
Yes. Many owners complete majority sales with equity rollover into the new entity.

How is inventory treated in a sale?
Most buyers set a working capital peg that includes inventory. Aging and obsolescence are key diligence items.

Do I need audited financials?
Not necessarily. Reviewed or accountant-prepared financials are sufficient if normalized properly.

Can I retain ownership of my real estate?
Yes. Sale-leaseback structures are common if you own your DCs or warehouses.

How long does a sale process take?
Typically 6–9 months from mandate to close.

Begin the Conversation

If you own or operate a distribution company in Canada and are considering a sale, recapitalization, or transition in the next 12–36 months, Windsor Drake offers the strategic guidance, execution expertise, and buyer network to deliver an exceptional outcome.

We help:

  • Maximize valuation through competitive positioning and outreach

  • Navigate complex diligence, tax, and structuring issues

  • Preserve your legacy and align incentives post-transaction

Windsor Drake | M&A Advisory for Canada’s Distribution Industry

Schedule a Confidential Consultation