DXP Enterprises strengthens rotating equipment platform with Arroyo Process Equipment acquisition

In a strategic move to bolster its presence in the industrial equipment sector, DXP Enterprises, Inc. (NASDAQ: DXPE) has announced the completion of its acquisition of Arroyo Process Equipment, a Florida-based distributor specialising in pumps, process equipment, and related services. This acquisition not only broadens DXP Enterprises’ geographic reach but also aligns with its long-term goal of accelerating end market diversification and enhancing its rotating equipment platform.

The acquisition, funded through cash reserves from DXP’s balance sheet, signifies the company’s continued commitment to growth through strategic investments. Founded in 1968 and headquartered in Bartow, Florida, Arroyo Process Equipment operates from three key locations, servicing northern, central, and southern Florida, as well as surrounding markets.

Why did DXP Enterprises acquire Arroyo Process Equipment?

The acquisition of Arroyo Process Equipment is part of DXP Enterprises’ aggressive acquisition growth strategy, aimed at strengthening its technical capabilities and expanding its market footprint. According to David Little, Chairman and Chief Executive Officer of DXP Enterprises, Arroyo’s established expertise in Florida complements DXP’s broad portfolio of technical products and services.

“Arroyo’s expertise and strategic presence in Florida will complement DXP’s breadth of technical products and services,” said Little. He emphasised that the acquisition will not only enable DXP to maintain its existing marketing strategies but also enhance the company’s ability to attract and retain top industry talent. This move aligns with DXP’s vision of becoming the leading North American provider of rotating equipment solutions.

The acquisition is expected to strengthen DXP’s customer relationships by offering a more comprehensive range of services. Arroyo’s strong presence in Florida provides DXP with a meaningful foothold in a region where it previously had limited exposure, opening doors to new growth opportunities.

How does Arroyo Process Equipment fit into DXP’s growth strategy?

Arroyo Process Equipment brings significant value to DXP’s operations through its diverse portfolio of industrial solutions, serving key sectors such as asphalt, mining, industrial water, and chemicals. The company’s sales for the twelve months ending December 31, 2024, were approximately $26.3 million, with an adjusted EBITDA of $1.3 million. The adjusted EBITDA was calculated based on income before tax, interest, depreciation, amortisation, and non-recurring items, adjusted for ongoing selling costs.

Kent Yee, Chief Financial Officer of DXP Enterprises, highlighted that the acquisition of Arroyo is consistent with the company’s strategy of targeting markets where DXP can deliver strong value through its technical expertise and operational efficiencies.

“We are very excited to have Arroyo as part of DXP. This acquisition allows us to diversify DXP’s end markets and provides scale in Florida—a market we have not historically served well,” said Yee. He added that the transaction is expected to benefit not only DXP’s shareholders but also its customers and employees, reinforcing the company’s mission to deliver value through strategic expansion.

What does this mean for DXP’s future in the rotating equipment market?

The acquisition of Arroyo Process Equipment is the latest in a series of strategic moves by DXP Enterprises to expand its rotating equipment platform. In November 2024, DXP completed the acquisitions of Burt Gurney & Associates and MaxVac Inc., both funded through cash reserves.

Burt Gurney & Associates, headquartered in Omaha, Nebraska, focuses on the municipal water and wastewater treatment markets, while MaxVac Inc., based in California‘s Central Valley, specialises in vacuum pump sales, repair, and maintenance, catering to industries such as electronics, food and beverage, and biomedical sectors.

David Little commented on these acquisitions, noting that they represent DXP’s commitment to enhancing its capabilities across multiple sectors. “BGA will provide DXP’s water division with new geographic territory, and MaxVac will enhance our vacuum pump capabilities. Together with Arroyo, these acquisitions create a robust platform for growth,” he stated.

How will DXP Enterprises benefit from end market diversification?

Diversifying its end markets has been a cornerstone of DXP’s growth strategy. By expanding into new industries and geographic regions, DXP reduces its dependence on any single market segment, ensuring greater resilience against economic fluctuations. The addition of Arroyo Process Equipment, along with previous acquisitions, strengthens DXP’s position across critical industries, including industrial water treatment, chemical processing, and vacuum technologies.

Arroyo’s extensive customer base and specialised expertise will enable DXP to expand its service offerings, improve operational efficiency, and tap into new revenue streams. This diversification not only drives growth but also enhances DXP’s competitive edge in the global market.

What’s next for DXP Enterprises?

Looking ahead, DXP Enterprises plans to continue its acquisition growth strategy, targeting companies that complement its existing operations and offer opportunities for synergy. The company’s focus remains on expanding its rotating equipment platform, enhancing technical capabilities, and driving end market diversification.

Kent Yee emphasised DXP’s commitment to strategic growth, stating, “The addition of Arroyo, Burt Gurney, and MaxVac is just the beginning. We will continue to seek out companies that align with our vision, strengthen our market position, and deliver value to our stakeholders.”

As DXP Enterprises moves forward, its ability to integrate new acquisitions effectively will be key to sustaining growth. The company’s track record of successful acquisitions, combined with its focus on innovation and customer service, positions it well for continued success in the industrial equipment sector.