Rexel International, Paris, made three headline acquisitions over the past two weeks in markets it has targeted for expansion. Rexel acquired Liteco in Canada's maritime provinces and Delamano and Etil, two Brazilian distributors.
Liteco, headquartered in Fredricton, New Brunswick, Canada, is the largest independent distributor of electrical supplies in the Canadian Maritimes region. Rexel already had claimed the mantle of largest electrical distributor in Canada, which is one of the world's largest markets. Rexel has over 200 branches across Canada that added about €1.2 billion (just under US$1.6 billion) to the Rexel Group's consolidated sales and posted double-digit organic growth (+11.4%) in 2011. Rexel said the move is consistent with its strategic aim of strengthening its share in key mature markets.
Founded in 1976, Liteco has 13 branches in the provinces of New Brunswick, Nova Scotia and Prince Edward Island employing about 120 people to serve a large base of customers in the residential, commercial, industrial and marine sectors. Liteco posted sales of approximately €50 million (about US$66 million) in 2011 and its profitability is in line with Rexel's operations in the country, Rexel said.
The acquisitions of Delamano and Etil will add about €100 million ($130.7 million) to Rexel's annual sales. This move gives Rexel a dominant position in a market it wasn't active in at all just over a year ago. In Jan. 2011, Rexel acquired Nortel Suprimentos Industriais, a large industrial distributor that does approximately €120 million ($156.9 million) in sales.
According to Rexel's press release announcing the acquisitions, it is now the largest electrical distributor in Brazil overall, and just as importantly the biggest in São Paulo, Brazil's richest and most populous state. São Paulo accounts for one-third of Brazil's gross domestic product and 22% of the nation's population.
“Brazil is one of Rexel's key priorities in its external growth strategy, which aims notably at expanding the Group's presence in emerging countries,” said the press release. “The size of Brazil's domestic market, its wealth in raw materials and its growth rate, combined with the opportunities linked to hosting major international events such as the Soccer World Cup in 2014 and the Olympic Games in 2016, offer strong growth prospects for the coming years.”
Based in Santo André, in the state of São Paulo, Delamano has distributed electrical supplies for 35 years and got into the MRO business several years ago. Through three distribution centers based in Santo André, Campinas and Vitoria and seven branches inside customers' facilities, the company posted sales of €60 million ($78.4 million) in 2011 and employed over 220 people.
Based in São Paulo since 1986, Etil is one of the major distributors of electrical supplies in the state of São Paulo with a strong focus on the real estate sector (business offices, hotels and restaurants). With one central branch and distribution center and three additional branches, the company posted sales of €40 million ($52.8 million) in 2011 and employed over 200 people.