Selling a distribution business: license the records first, and keep the sale clean

Distribution M&A in 2026: who is buying distributors

Distributors keep changing hands, at a slower pace than last year. KSM's Q2 2026 distribution M&A report counted 75 announced transactions in the quarter, down from 87 in Q1 2026 and 97 in Q2 2025. It says strategic buyers continued to lead, with private equity active mainly through add-on acquisitions, and that industrial and building products distribution held up better than the market overall (source: KSM, Q2 2026 distribution M&A report).

The named deals show who is buying: DXP Enterprises acquired General Repair Service, SRS Distribution acquired Mingledorff's, and Robert Madden Industries acquired AC Supply (source: KSM, Q2 2026 distribution M&A report). Consolidators like these buy for branches, line cards and customer relationships. In our view, many of the sellers are family-owned independents whose ERP holds the most complete record the company has of how it quotes, buys, stocks and serves. That record is what AI buyers ask for.

This guide covers one narrow question: how a license of the company's records fits around a sale. It doesn't replace your M&A advisor's work on the sale itself.

What a data license is, and is not, in a distribution sale

A data license is a contract. Your company grants an AI data buyer the right to use a de-identified copy of specific systems, for a stated purpose and term, in exchange for a payment. One buyer program's FAQ says the company keeps its originals and its systems and the program receives a license to a de-identified copy, and a data marketplace says ownership never transfers (source: program terms, Regulr buyer directory).

• You keep the records. The ERP database, email, help desk and CRM stay with the company and convey to an acquirer as they would without a license.
• It is not equity. No shares change hands, so a license does not dilute owners or add a party to the cap table.
• It is not a sale of your customer list. Customer and supplier identities are masked before delivery, and the buyer is licensing workflow history for training AI.
• It does not touch your line cards. Your supplier agreements stay in place, which is why SPA and rebate data is kept out of scope. See our guide to special pricing agreements and rebates in a data license.
• It is a contract that survives. Exclusivity, confidentiality, deletion and any continuing delivery duties bind the company after you sell it. That is why acquirers read it.

Which distributor records are usually in scope

Buyers want the record of decisions your team made, linked to outcomes. In a distributor, that usually means:

• Quotes and quote-to-order conversion, with customer prices masked or banded
• Sales orders and order lines, often a decade or more on one ERP
• Purchase orders, supplier confirmations and expedite emails
• Inventory, replenishment, transfer and dead-stock history
• Customer service tickets and shared-inbox threads with resolutions
• Returns, RMAs, credits and warranty decisions
• Credit decisions and collections notes, with personal data removed
• SOPs, training material and CRM history

What usually stays out is data someone else owns or protects: manufacturer special pricing and rebate terms, customer contract prices, licensed catalog content, card and guarantor data, and ERP vendor documentation. The wholesale distribution data licensing guide covers the full list, and our guide to distribution ERP data export covers getting the history out cleanly.

Exclusivity and term: the clause acquirers read first

Exclusivity decides whether the company, and whoever owns it next, can license the same records again. Buyers publish very different positions:

For a seller, three points follow. First, a 24-month restriction signed in late 2026 runs into late 2028. A private equity platform buying your company as an add-on may want to license the combined records of its portfolio, and your exclusivity would carve your history out of that.

Second, read what the restriction covers. The 24-month program words it as licensing the same data for external AI training (source: program terms, Regulr buyer directory). Ask any buyer to state in the contract that the company's own internal use of its records, including a future owner building its own pricing or replenishment tools, stays unrestricted.

Third, a perpetual exclusive license is a permanent feature of the company. That may be priced accordingly, but an acquirer will want to see it early rather than find it in the data room.

Timing a license around a distributor sale: before the LOI or after

Before you sign an LOI is usually the cleanest point. The license is a known, signed contract that goes into the data room, the acquirer prices the business knowing about it, and the payment may already have landed. One buyer program says most companies go from first call to payment in about 2 to 3 months, and another pays net 30 to 60 days after the data is approved (source: program terms, Regulr buyer directory). Plan the license so it finishes before the sale gets busy.

After you sign an LOI, expect less room. LOIs commonly include a no-shop period, and purchase agreements commonly require the business to run in the ordinary course between signing and closing. A new data license is not ordinary course for a distributor, so in practice the acquirer has a say.

After closing, the decision belongs to the new owner. In an asset sale, the purchase agreement's definitions of purchased and excluded assets decide who owns the books, records and data. If you want the license proceeds, the license has to happen while the company and the records are still yours.

Where the payment goes (company cash at closing, installments due later, any clawback) is set by the deal documents. We don't give tax or deal-structure advice; bring the license terms to your M&A advisor and accountant early.

Family succession and retirement: licensing before you hand over

Not every exit is a sale. Many distributors pass to the next generation or to a management team, and distributor succession planning can run over years rather than months. A data license fits that timeline well, because it does not change who owns the company or its records.

• Agree who decides. The people who will run the company should agree to the scope and any exclusivity, because they will live with the contract.
• Capture the archive before a system change. A new generation often brings a new ERP. Take the full export of the old system first, or the decade of history a buyer values may not come across.
• Decide where the payment goes. License proceeds could go toward a retiring owner's payout or stay in the company. That is a structure question for your advisors, not something a license settles.

If you are closing the distribution business instead

A closed distributor can still license its records, as long as the records still exist. One broker that names wholesale and distribution accepts closed firms with 20+ staff at peak, a large AI training-data company runs a separate track for closed companies with 50+ employees at peak and substantial Teams or Slack history, and a buyer program for industrial companies accepts companies that are no longer trading (source: program terms, Regulr buyer directory).

The clock is the problem. Hosted ERP data has a short life once you cancel:

• Infor provides a native database export if you ask within 30 days of termination (10 for single-tenant) and permanently deletes customer data within 35 days (source: Infor Information Security Plan V1.26 (11.1, 11.2)).
• Acumatica keeps Subscriber Data available for 60 days, then only for a fee (source: Acumatica Subscription SaaS Agreement (5.2)).
• Advantive, which sells DDI System, may destroy customer data after 90 days (source: Advantive Master Services Agreement 2025 (11(c))).
• NetSuite deactivates the account and deletes the data after the agreement ends (source: Oracle NetSuite Subscription Services Agreement v061526 (5.1)).

Export first, then cancel. On-premises systems such as Prophet 21, Eclipse or Sage 100 survive as long as someone keeps the server or a backup.

Distribution business valuation multiples: what a license does and does not change

Owners searching for distribution business valuation multiples or wholesale business valuation want a number. We haven't found a current, sourced EBITDA multiple for private distributors that we can cite. The closest public figure is broader: Capstone Partners' May 2026 industrials report put the 2025 average at 8.9x EV/EBITDA, below a 10.2x average for 2018 to 2025, with sponsors in 47.6% of deals (source: Capstone Partners, annual Industrials M&A report (May 4, 2026)). That covers industrials as a whole, not distribution, and KSM's distribution report publishes no multiple (source: KSM, Q2 2026 distribution M&A report). Ask your M&A advisor for distribution comparables.

What we can say is narrow. We don't claim a data license raises the multiple an acquirer pays, and you should expect an acquirer to treat it as one-time income. For the license side, our data value checker shows which programs a company of your size and history likely fits. For example, one buyer program's FAQ gives indicative offers of $200K to $500K for 20 to 49 full-time US staff and $400K to $900K for 50 to 149, and a broker that names wholesale and distribution shows an estimator illustration of $385K to $895K for a 100-person, 10-year firm (source: program terms, Regulr buyer directory). Treat both as advertised figures, not what your company will receive.

What acquirers will ask about a data license

• Scope. Which systems, which years and which record types, and what was excluded.
• Exclusivity and term. How long, which uses it covers, and whether it binds a future owner's own AI work.
• Supplier pricing. Evidence that SPA, ship and debit and rebate data, and confidential supplier price lists, were kept out.
• De-identification. Who masked customer, supplier and employee identities, and whether you audited a sample.
• Deletion. What happens to the raw upload. One buyer program says it deletes raw data within 30 days of delivery, and a large AI training-data company says it deletes originals after processing (source: program terms, Regulr buyer directory). Keep the written confirmation.
• ERP terms. Whether your ERP vendor holds rights in aggregated or AI-processed data that an exclusive buyer should have been told about.
• Money and obligations. Amounts received and still due, refresh deliveries, warranties you gave about the data, and any clawback or indemnity.

Checklist: licensing distributor data before a sale

1. Inventory your systems: ERP, any older ERP database, email, help desk, CRM, e-commerce, WMS, routing.
2. Confirm which years each holds and whether the archive from your last migration still exists.
3. Pull your largest supplier agreements and mark any confidentiality terms on pricing and programs.
4. Collect offers from more than one buyer on the same scope, and compare exclusivity as closely as price.
5. Ask each buyer to state in writing how the license treats a sale or change of control.
6. Approve the scope yourself, audit the de-identified sample, and keep the deletion confirmation.
7. Sign before the LOI if you can, and list the license in your disclosure materials either way.

Ready to see where your company fits? See what your distribution records could qualify for, or compare the programs in our buyer directory.

Frequently asked questions

Sources

KSM, Capstone and the ERP terms read on their own pages on October 18, 2026. Program terms checked October 15, 2026; our buyer directory lists the programs and links to their published terms.

1. KSM, Q2 2026 distribution M&A report
2. Capstone Partners, annual Industrials M&A report (May 4, 2026)
3. program terms, Regulr buyer directory
4. Infor Information Security Plan V1.26 (11.1, 11.2)
5. Acumatica Subscription SaaS Agreement (5.2)
6. Advantive Master Services Agreement 2025 (11(c))
7. Oracle NetSuite Subscription Services Agreement v061526 (5.1)