Stationery and office supplies merchant wholesalers

Boxes, films, towels, cups and copy paper delivered to factories, offices and restaurants from a regional warehouse. It is reachable: a lease, two trucks and a manufacturer willing to sell to you, and 381 of the 918 Canadian establishments have fewer than five people. The group is real money — $14.9B of Canadian operating revenue in 2023 at a 7.5% pre-tax margin, though down 4.1% on the year [A]. The cut is that nothing the distributor sells is its own. Veritiv, the last big listed distributor in this trade, reported $7.15B of net sales and a record 7.2% adjusted EBITDA margin in 2022, and within months accepted a take-private at $170 a share, about $2.6B [A] — roughly five times that record year's adjusted EBITDA, which is the market's own statement of how durable it thinks the spread is. It had already sold its Canadian business in May 2022 [A]. The margin in this trade is a purchasing rebate earned by volume and handed partly back to the customer in contract bids; the entrant buys the same case of towels at a worse price and sells it to a buyer who puts the contract out again next year. The customer's switching cost is one phone call. What builds a position is density — more drops per route in one city — and that is precisely the asset the private-equity roll-ups are paying to assemble, branch by branch. A small distributor in this group is best understood as an acquisition target, not an entry strategy; the honest way in is to buy an existing route book, where the scrap-yard record next door (4181) turns on a site permit rather than a customer list. The distribution software sold to this trade is screened separately.