Billionaire Jacobson Emerges With Power Saws as MSC Rises

Increased demand for light bulbs and power tools has made a billionaire of Mitchell Jacobson, the chairman of MSC Industrial Direct Co., the world’s third-largest provider of office and industrial equipment.

The Melville, N.Y.-based company’s shares are up 14 percent this year and reached a record last week. The surge has pushed the 61-year-old’s net worth to $1.3 billion, according to the Bloomberg Billionaires Index. Jacobson, the company’s largest shareholder, has never appeared on an international wealth ranking.

“There are two factors working in MSC’s favor,” said Derek Jose, an analyst with Longbow Research in Independence, Ohio. “Customers are low on inventory, so they are going to be cycling through orders more quickly. Once demand gets solid enough, companies are going to build inventories again.”

MSC’s rise comes amid an increase in demand from industrial and office customers for items such as power saws, snow blowers and copy paper. Lake Forest, Illinois-based W.W. Grainger Inc., the industry’s biggest supplier, has risen 14 percent year-to- date, creating two new billionaires -- David Grainger and James Slavik -- earlier this month. Paris-based Rexel SA (RXL), the industry’s second-biggest provider, is up 11 percent.

The majority of MSC’s $2.4 billion in annual sales are generated from the 18 million pieces of direct mail it sends each year. Its Big Book, a catalog started by Jacobson’s father, MSC founder Sid Jacobson, was introduced in 1964. Sales are also made online and by salespeople based in 100 regional offices.

Almost all of the company’s offerings are available to ship the same day from four fulfillment centers in the U.S., according to the MSC website.

Cutting Tools

Sid Jacobson started selling cutting tools from the trunk of his car on the lower east side neighborhood of Manhattan in 1941. Mitchell became president of the family business, then known as Sid Tool, in 1982, and CEO in 1995. He stepped down as chief executive a decade later, about five months after his father and mother died of carbon monoxide poisoning in their Long Island home, according to a Jan. 1, 2006, story in the New York Times.

Jacobson owns more than 9.2 million shares of MSC, most of which is Class B stock that converts to Class A shares on a one- for-one basis, according to regulatory filings with the U.S. Securities and Exchange Commission. He has collected almost $400 million in stock sales and more than $100 million in dividends since the company’s 1994 initial public offering, according to data compiled by Bloomberg.

Bloomberg Billionaires Index

Bloomberg Billionaires Index

Rachel Rosenblatt, a spokeswoman for MSC, said Jacobson declined to comment on his net worth.

MSC fell 0.1 percent to $86.46 at 10:01 a.m. in New York after new housing data was released by the Commerce Department in Washington. According to the report, builders broke ground in January on the most U.S. single-family homes in more than four years.

Work began on 613,000 one-family houses at an annual rate last month, the most since July 2008 and up 0.8 percent from December’s 608,000, the report said.

To contact the reporter on this story: Brendan Coffey in Boston at bcoffey10@bloomberg.net

To contact the editor responsible for this story: Matthew G. Miller at mmiller144@bloomberg.net

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