WESCO Adds to Communications Group with Deal to Acquire TVC Communications

Nov. 19, 2010
WESCO International, Inc., Pittsburgh, announced that its WESCO Distribution subsidiary has agreed to acquire TVC Communications LLC (TVC), Annville,

WESCO International, Inc., Pittsburgh, announced that its WESCO Distribution subsidiary has agreed to acquire TVC Communications LLC (TVC), Annville, Pa., from Palisades Associates, a Bethesda, Md.-based private equity firm, for approximately $246.5 million. The transaction, expected to close by year-end, is subject to customary closing conditions and regulatory approvals.

TVC is a distributor of broadband communications network infrastructure products serving the cable, telecommunications and satellite industries. TVC's annualized sales as of Oct. 31, 2010 were approximately $300 million, the company said, it employs over 300 people and operates 20 locations serving markets in the United States, Canada, Latin America and Europe.

“TVC is a logical extension to WESCO's existing Data Communications business — some similarity in products, different markets. The addition of the TVC business will enable WESCO to offer a full suite of data communication solutions,” Richard Heyse, WESCO vice president and chief financial officer, told Electrical Marketing.

The TVC operations will continue to operate under James Manari, president and chief operating officer of TVC prior to the acquisition, and the existing leadership team under the TVC name. It will report through WESCO's Data Communications business, which the company has built around Communications Supply Corp. (CSC), a datacom distributor WESCO acquired in late 2006, said Heyse.

“The addition of TVC will make WESCO the leading one-stop shop for enterprise and telecommunication infrastructure solutions by providing the necessary products to support the entire broadband network, from signal origination to and through the customer premises,” Stephen A. Van Oss, WESCO's senior vice president and chief operating officer, said in a release. “TVC has a track record of success, and an experienced management team that will report to David Bemoras, vice president and general manager of our Data Communications and Security business. We are looking forward to the addition of this seasoned and energetic management team to WESCO.”

Heyse said the company would consider combining TVC locations with existing WESCO and CSC locations where it makes sense, a strategy the company has recently adopted with its Carlton-Bates subsidiary — a distributor of industrial supplies and factory automation products. “We will consider combining sites where it creates a more robust market capability for the local market,” Heyse told EM.

WESCO announced last week that the Carlton-Bates operations in Denver and Indianapolis are being rolled into WESCO locations so they can provide their expanded range of products to the same customers. Kimberly Cherry will lead the Carlton-Bates operation in Indy as the new market field sales representative, and Kevin Coursey will lead its Denver operation under the same title. Todd Farnsworth, WESCO group vice president and general manager, said the same approach will be taken in other of the 30 markets in which Carlton-Bates operates. “It is the first of several new locations to be opened within the next two years and proof of an increased commitment to our partnership with WESCO,” said Farnsworth.

TVC, which was advised in the deal by Jefferies & Co., New York, stands to gain from the association with WESCO, Manari said. “We are excited to have the opportunity to be part of the WESCO organization, with its outstanding logistics capabilities and broad product and service offerings. The combined resources of our companies, in addition to our industry knowledge, experience and excellent customer service, will provide a terrific value proposition to both our customers and our loyal manufacturing partners.”

Among the benefits for WESCO is TVC's geographic reach, said WESCO president and CEO John Engel. “TVC strengthens WESCO's data communications platform by providing a more comprehensive suite of products and services to existing and new customers, while expanding our geographic footprint into previously untapped international growth markets.”

The acquisition will be financed utilizing WESCO's existing cash and credit facilities, Engel added.