While it was a relatively quiet year on the acquisition front, there was plenty of other news for EM’s editors to cover. Here are our picks for the biggest news of the year.
IMARK Group and Equity/EDN Marketing Group merge.The story on the merger of IMARK and Equity/EDN goes beyond the sheer numbers, but they do indeed paint a picture of a huge deal: combined 2008 sales of approximately $14 billion, combined industry market share of an estimated 18 percent and a combined membership of 1,135 electrical distributors operating an estimated 2,100 locations.
It’s a merger of two marketing/buying groups with distinctly different personalities. IMARK is respected in the industry for the professional marketing programs it offers members and the top-tier distributors it attracts, while Equity/EDN is proud of its free-wheeling style and the combined purchasing clout it offers to help many of the electrical market’s smallest full-line electrical distributors compete with the big boys. Many of the distributors in IMARK’s stable are among the fastest-growing distributors in the land and can be counted by the fistful on Electrical Wholesaling’s Top 200 listing. They often compete head-to-head with members of Affiliated Distributors (A-D), Wayne, Pa., which before the merger was generally considered to be the largest group in North America when ranked by total member sales volume. According to information on www.mya-d.net, A-D has 128 distributors with 1,192 locations that do a combined total of $11 billion in electrical sales.
Rexel announces intentions to convert all branches to the Eclipse/Activant platform. When you acquire dozens of U.S. distributors over the years you are bound to end up with a diverse array of distribution software systems that need to be maintained and upgraded. In 2009, Rexel moved to standardize its entire distribution network of well over 200 locations on Eclipse. The deal is Activant’s largest ever.
In a light year for distributor merger and acquisition activity, strategic deals lead the way. When Electrical Marketing’s editors sit down to write this article each year, a sizeable chunk of it is usually devoted to all the acquisitions large national or regional distributors made over the past year. It’s not unusual for us to report on more than two dozen distributor acquisitions. We won’t come close to that number in 2009 because of the economy and more specifically because of the difficulty accessing capital to fuel acquisitions. The credit squeeze has put the kibosh on power shopping, but as the credit markets open up, we fully expect to see deals a-plenty.
Despite the credit crunch, W.W. Grainger Inc., Lake Forest, Ill., was in full-on acquisition mode, and inked several interesting deals, including the purchase of an energy-service company (ESCO). Its acquisition of Alliance Energy Solutions, Oxford, Conn., will help it provide a full basket of product supply and installation services to end users. Grainger also took a 100-percent stake in Asia Pacific Brands India Private Limited, one of India’s larger electrical and industrial distributors and increased its stake its Japanese MRO venture, MonotaRO.
Schaedler YESCO, Harrisburg, Pa., has been busy expanding throughout Pennsylvania, as during the past two years the company bought the electrical division of H&S Supply of New Oxford, Pa.; B&R Electric Co., St. Marys, Pa.; and the Indiana, Pa., branch of Gertz Electric. Its purchase this year of Service Electrical Supply Co. Inc., Pittsburgh, was even bigger, as it established the company as a force to be reckoned with in the Pittsburgh market, which has enjoyed a surge of growth in recent years.
Cape Electrical Supply, Cape Girardeau, Mo., made several deals, too, buying utility specialist Delmo Electric, Fisk, Mo., and Beck Electric Co., Kennett, Mo. Other acquisitions of note include the purchase by Arrow Electronics, Inc., Melville, N.Y., of A.E. Petsche Co., Arlington, Texas, a distributor of interconnect products that was ranked No. 40 on EW’s Top 200; the acquisition by Shealy Electrical Wholesalers, Columbia, S.C., of South Carolina-based Santee Electric Supply; and the move by OneSource Distributors, Oceanside, Calif., to buy certain assets of Berkeley Engineering Inc., a Rockwell Automation distributor in Honolulu. Other 2009 mergers of note include the marriage of Richardson Electric Inc., Chattanooga, Tenn., and Creswell Industrial Supply, also of Chattanooga, and the merger of two rep firms: Electrical Marketing Services, Altamonte Springs, Fla., and GCA Electrical Lighting, Tampa, Fla., which will now operate jointly as GCA-EMS, based in Tampa.
The lighting market leads manufacturer M&As, but the biggest deal of the year is Hubbell’s acquisition of Burndy.The lighting market had the biggest share of acquisitions this year as manufacturers scrambled to bulk up their offerings of LED products, but it was Hubbell Inc.’s purchase of Burndy/FCI, Manchester, N.H., that made the biggest splash. Burndy, one of the best-known brands in the connector and termination market, will strengthen Hubbell’s grip on the utility, industrial and commercial markets.
While several of the biggest names in the lighting game made acquisitions or partnered with other manufacturers in the LED arena, Philips Electronics made the most headlines. The company bought Dynalite, an Australian lighting control manufacturer; Teletrol, Manchester, N.H., in the building automation and energy management markets; and licensed its LED technology to Acuity Brands, Atlanta, for use in Acuity lighting fixtures. Acuity was busy, too, acquiring SensorSwitch, Wallingsford, Conn., and Control & Design Inc., a California-based manufacturer of lighting controls. Cooper Industries, Houston, bought Irvine, Calif.-based Illumination Management Solutions Inc., a manufacturer of LED components, and Pauluhn Electric in industrial lighting.
In the wire and cable market, Alcoa sold its wire harness and electrical distribution business to Platinum Equity, a private investment firm, which later bought a controlling interest in Alcan Cable. General Cable Corp., Highland Heights, Ky., dug deeper into the broadcast and entertainment markets with its acquisition of Gepco International Inc., Des Plaines, Ill. Southwire, Carrollton, Ga., acquired Maxis Corp., Phoenix, a manufacturer of wire handling equipment and tools. Also making news in the wire and cable market in 2009 was the merger of two wire handling equipment manufacturers, Reel-O-Matic, Oklahoma City, Okla., and Tulsa Power, Tulsa, Okla.
Other manufacturer news of note was the move by Emerson Electric, St. Louis, to expand in the data center market with the purchase of Avocent Corp., Huntsville, Ala.; the purchase by Rockwell Automation, Milwaukee, of Rutter Hinz Inc., an engineering firm based in Saskatoon, Saskatchewan.
— Jim Lucy