With its second acquisition in the last three months, OneSource Distributors, San Diego, is seeking to build its industrial/OEM business in the southern California market.
The company has agreed to buy Argo Electric Supply Co., Downey, Calif., and Pacific Parts & Controls Inc., Chino, Calif.
Pacific Parts & Controls was founded in 1974 by current President and Chief Executive Officer Frank Renek. In 1995, Pacific Parts & Controls acquired Argo Electric Supply. At that time, Renek made Argo Electric Supply the sole branch of Pacific Parts. Combined, the two companies do approximately $14 to $15 million in sales volume and have about 35 employees.
This acquisition follows the purchase of Orange Coast Electric Supply (OCES), Los Angeles, in November. OCES, founded in 1980, was also an industrial distributor.
Bob Zamarripa, president of OneSource Distributors, said that these acquisitions are part of a plan to capture more territory.
“OneSource's core strategy is really to continue to expand throughout southern California in our primary markets, which are industrial MRO, OEM and industrial contracting,” Zamarripa said. “Our primary goal is to continue to expand throughout southern California and look at companies that match up with those core markets that we serve.”
He added that OneSource's target markets represent a potential $6 billion of business.
OneSource has ten locations and more than 220 employees throughout the Southwest. The company does approximately $120 million in annual sales.
Although Pacific Power & Controls shares product markets with OneSource, according to Renek, this new acquisition offers more than just the convenience of the companies' similar product offerings.
“This is their leap up into the Los Angeles County market,” he said. “(And) The Chino operation is actually located in San Bernardino County, so that gives them access to the Inland Empire.”
Renek said that the acquisition will also give OneSource the added benefit of several new industrial product lines.
“These are their first stores that will have Cutler Hammer products, and also Crouse-Hinds. We have those products that they don't have in their other stores,” Renek said. “We're a good fit for them because we concentrate on the industrial market like they do, and the OEM market like they do. We're in the same business.”
In addition to being an industrial distributor, Pacific Parts is also one of the few authorized Cutler-Hammer Navy distributors in the country.
“The electrical stuff they put on ships — the Navy application — means the contactors and the devices are built to what they call high-shock standards. The Navy has a special high shock test where (components) have to pass this high-G test. There are less than a dozen (such distributors) around the country,” Renek said.
According to Renek, Argo and Pacific Parts do a lot of their business with institutional customers, including hospitals, schools and city and county government. He noted that Argo Electric, founded in 1950, has the added value of proven longevity.
Renek will remain with OneSource on a consulting basis.