Two distributors merge

The Merit Group, parent company of Lancaster Distributing, has announced an agreement to purchase the outstanding shares of Five Star Products, a subsidiary of National Patent Development Corp., for $30 million. The all-cash transaction, which is subject to the approval of National’s shareholders, will net $13 million after the required repayment of Five Star’s existing debt, according to the announcement.

Five Star Products is headquartered in East Hanover, N.J., and distributes paint, sundries and hardware products to more than 3,000 independent retailers in the Northeast and Mid-Atlantic states with particular strength in the greater New York metro area. In addition to its warehouse in East Hanover, Five Star also operates a distribution center in Newington, Conn.

The Merit Group, which does business as Lancaster Distributing, is based in Spartanburg, S.C. The company provides wholesale distribution of paint sundry and drywall products to approximately 10,000 retail customers in the Unites States, the Caribbean, and Central and South America. It operates seven regional distribution centers.