Rexel, Paris, France, is selling all its operations in its South East Asia region to American Industrial Acquisition Corporation Group (AIAC), a private equity firm focusing on investment in the industrial sector, based in New York.
The transaction includes seven South-east Asian countries in which Rexel built up operations over many years: Thailand, Indonesia, Singapore, Vietnam, the Philippines, Macau and Malaysia. Together, Rexel’s operations in these countries produced €136 million ($161 million) in 2016 but the group estimated a decline of 21% in 2017 to €108 million ($128 million). In EBITDA terms the region produced about €1 million ($1.18 million) in profits in 2016 but forecast a loss of €3 million ($3.6 million) for 2017.
The company said in a release that the divestment will allow it to refocus its managerial efforts on its main geographies and to improve group profitability, in line with its strategic plan. The sale of its Southeast Asia businesses brings Rexel to 17% of its disposal plan, which should be completed by the end of 2018.
AIAC is a privately held industrial investment company with a long-term mission to build enduring businesses. Established in 1996, it holds a portfolio of over 50 manufacturing and distribution locations with over 15,000 employees in 19 countries in North America, Europe and Asia and total annual revenues of over $2 billion. Its holdings include PACS Switchgear LLC; Holophane SAS, a maker of lenses for automotive lighting; and Champlain Cable Corp., which makes wire and cable for automotive, defense and marine applications.
Rexel acquired two of its distributors in its South East Asia region – Lenn International, in Singapore, and Quality Trading, Bangkok, Thailand – in 2013. Lenn International was intended to bolster its business in the oil and gas vertical, while Quality Trading was most active in Thailand’s OEM, MRO and lighting markets.