In a move that would greatly expand Border States’ coverage in Minnesota, the Fargo, N.D.-based company has agreed to purchase Minnesota Electric Supply Co., a full-line provider of electrical products with locations in Alexandria, Bemidji, Coon Rapids, Faribault, Mankato, Marshall, St. Cloud, and Willmar, Minn.
Border States has been a strong player in the Dakotas, Minnesota and more recently in the Southwest and Mountain states, and this acquisition will solidify the company’s electrical operations in the Upper Midwest. The company’s locations in this region include branches in Minneapolis and Alexandria, Minn., and several locations in Wisconsin.
Minnesota Electric Supply’s eight branches will be included in Border States’ Northeast region. The Minnesota Electric Supply name will not change except to include “A Division of Border States.” The transaction is expected to close on April 1.
Steve Peterson, Minnesota Electric Supply Co.’s president and CEO, will assist with the transition and then leave the company to pursue other opportunities. Steve Linder, Minnesota Electric Supply’s chairman/board of directors, also will not join Border States. All of the current Minnesota Electric Supply branch managers will continue to lead their branches. In addition to the branch managers, Ray Stoel, Border States’ vice president of sales, Renee Cool, Border States director of marketing/communications, and John Klaers, Border States controller, will join Border States. Their titles will change under the Border States structure.
With $601 million in 2005 sales, Border States is ranked as the nation’s 12th largest electrical distributor, according to Electrical Wholesaling’s 2006 listing of the top 200 electrical distributors.
Minnesota Electric Supply Co. began distributing products in Willmar in 1945. The company has 130 employees serving over 3,000 customers, annual sales of approximately $85 million and is ranked 87th in Electrical Wholesaling’s Top 200 listing. Minnesota Electric Supply has been active in the Minneapolis metropolitan market since it acquired the Judd Electric branch in Coon Rapids, Minn., in the early 2000s and has been a strong competitor to Border States in the construction market, said Tammy Miller, Border States CEO.
In addition to serving the construction and industrial markets, Border States has always had a large utility business. In contrast, Minnesota Electric Supply’s focus is on the construction market, serving primarily smaller to mid-sized contractors.
“We will not change their focus, but will look for opportunities to grow the business in the construction market,” said Miller. “We may also look at opportunities to expand in the industrial, utility and datacom markets in select communities in Minnesota if and when there are good commercial reasons to do so.”
Border States and Minnesota Electric Supply both have locations in Alexandria. The Border States employees will join the Minnesota Electric Supply employees in that company’s branch location.
“Border States will allow Minnesota Electric Supply Co. to be associated with an industry leading organization ensuring the resources needed to provide for future growth, customer support and employee opportunities,” said Peterson of Minnesota Electric Supply Co.
Following the acquisition, Border States will have more than 1,200 employees and 51 branch operations in 11 states and Mexico. Active employees own 100 percent of the company under the Employee Stock Ownership Plan (ESOP). Border States is one of the top 100 largest private ESOP companies in America.
“Our companies are a perfect fit,” said Miller. “We both understand the value of hard work and invest heavily in our employees, facilities and equipment to provide our customers the expertise and technical support they need.”