With an eye toward expanding its operations in India, W.W. Grainger Inc., Lake Forest, Ill., signed a definitive agreement to acquire full ownership of its joint venture in India, Asia Pacific Brands India Private Limited, one of India’s leading industrial and electrical wholesale distributors. Grainger initially bought a 49.9 percent stake in the company in July 2008. (See EM – Aug. 15, p. 3).
In a press statement, Jim Ryan, Grainger’s chairman and CEO, said the acquisition will help Grainger grow its business in India. “As that economy gets more competitive, Indian companies want efficient and reliable ways to get the quality products they need to keep their facilities running and their employees safe,” he said in a press release. “With annual revenues of approximately $30 million, Asia Pacific will provide us a starting position in a large, high potential MRO market.”
Grainger will contribute an estimated $1.2 million to gain full ownership. Late last year, the company wrote down its investment due to the bankruptcy filing of Asia Pacific’s largest supplier.
With more than 20 locations and more than 4,000 dealer relationships across India, Mumbai-based Asia Pacific Brands, formerly part of Hagemeyer’s stable of international distribution businesses and known as Hagemeyer India Ltd., will go to market under the Grainger brand. In the electrical market the company stocks Panduit, Schneider Electric, APC, Schreder Lighting and Molex.
Erin Ptacek, a Grainger spokesperson, said Grainger has relationships with approximately 2,000 suppliers in the United States, and that several of these suppliers either have a presence in India or are intending to offer their products in India. “Grainger will be using its existing relationships with these suppliers to start distributing their products in India,” she said. “Adding products using Grainger’s relationships with the suppliers and combining that with Asia Pacific Brands national footprint in India will create excellent synergy for expanding this business.”
Bonnie McIntyre, Grainger’s vice president for International Market Development, said over the past six months, Grainger streamlined Asia Pacific’s operations, strengthened its management and enhanced its supplier base. “We will continue to make prudent investments in the business to deepen our presence in India’s growing economy,” she said in a press statement.
Ptacek added that Asia Pacific Brands was a “first mover” in electrical distribution in India. “The value that Grainger brings to customers in India is in its relationships and distribution expertise which will enable Asia Pacific Brands to broaden its product offering and additional capabilities to meet customer needs,” she said.