UPDATE 3-MSC Industrial to enter Canada with $550 mln Barnes unit buy

Fri Feb 22, 2013 10:56am EST
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* To buy Barnes's North American distribution business

* Expects deal to generate $15 mln-$20 mln in cost synergies by 2015

* Says deal to reduce second-quarter earnings by $0.02 per share

* Barnes shares rise 14 percent, MSC shares up 4 percent

By Sagarika Jaisinghani

Feb 22 (Reuters) - Industrial products distributor MSC Industrial Direct Co Inc said it would buy the North American distribution business of Barnes Group Inc for $550 million to gain access to the metalworking and maintenance, repair and operations (MRO) market in Canada.

Barnes shares rose as much as 14 percent to $27.85 on the New York Stock Exchange in early trading. MSC's shares rose 4 percent to $86.50.

The acquisition would nearly double MSC's sales force and boost revenue to about $4 billion by 2016, Chief Executive Erik Gershwind said in a statement.

MSC had total revenue of $2.36 billion in the year ended Sept. 1.   Continued...