As part of a company-wide restructuring plan, the Warren Electric Group, Houston, has sold eight branches locations in the north and central part of Texas to The Reynolds Co., Dallas.
Under the terms of the agreement, Reynolds would purchase certain assets and/or assume lease obligations in Dallas, Longview, Paris, San Antonio, Sherman, Tyler, Wichita Falls and Waco. The Dallas operations would be merged with Reynolds' existing facility in Dallas and would give Reynolds exclusive rights to the Allen-Bradley franchise in Dallas. Previously Reynolds and Warren had shared a dual franchise arrangement in Dallas.
The business units in all other locations would remain open and operating under Reynolds management, according to the companies.
Cheryl Thompson-Draper, chairman, president and chief executive officer of Warren Electric, is driving a turnaround plan to help the company rebound from last year, which represented the first operating loss during Thompson-Draper's watch. Warren has already laid off about 55 of its approximately 550 workers, cut expenses and consolidated offices in an effort to shore up its balance sheet.
With $271 million in 2001 sales, Warren Electric is the 19th largest electrical distributor, according to Electrical Wholesaling magazine's Top 250 listing. The company said it will continue to service its telecommunications and data communications customers in both Dallas and San Antonio.
“As part of our restructuring plan, we are committed to focusing on our core markets, which include Fortune 500 companies in the oil and gas exploration and production, heavy process petrochemical, pharmaceutical, food and beverage, pulp and paper, original equipment manufacturers, telephone and power utility markets along the Texas and Louisiana Gulf Coast, the Caribbean Rim and in international markets worldwide,” said Draper. “Although these North and Central Texas locations represent healthy business units, the markets that they serve are more closely aligned with the markets of The Reynolds Co. The transition of these locations to Reynolds clearly represents synergies for the employees, vendors and customers of both Reynolds and Warren.”
“We are pleased to acquire these locations as part of our strategic plan to grow our business and enter new markets with a synergistic fit to our overall business,” said Walt Reynolds, president of Reynolds. “This acquisition will make our company a larger regional player in these markets and afford us the benefits of enhanced economies of scale. We are excited about working quickly to integrate the employees and customers of these locations into The Reynolds Co.”
The 155-employee Reynolds Co., the 46th largest electrical distributor in EW's Top 250 list with $95 million in sales, currently serves customers in Dallas, Fort Worth, San Antonio, Austin, Abilene, Odessa and Houston.