Strengthening its position in the southern United States, Rexel S.A., the world’s largest electrical distributor, has acquired Braid Electric Co., Nashville, Tenn.
Braid Electric is the nation’s 141st largest electrical distributor, according to Electrical Wholesaling magazine’s 2004 Top 200 listing. The company, which had 2003 sales of $28.3 million, has branches in Kentucky in Bowling Green, and Danville; and in Tennessee in Clarksville, Columbia, Cookville, Murfreesboro, Nashville and Shelbyville.
Ben Gambill, Braid Electric’s president, and Tom Gambill, company vice president, will remain with Braid Electric, a division of Rexel, as regional managers. They will report to Tim Hogan, president of Rexel’s Southern region in Meridian, Miss.
Gambill said the sale of the company to Rexel will accelerate the growth of the company and provide additional opportunities to Braid Electric’s 100 associates.
With lighting showrooms at three of its locations, Braid Electric does business in the residential construction sector. Just as important is the business it does in the industrial and commercial markets, said Gambill. “We’re very broad-based in our customer mix,” he said.
With the exception of one branch in Danville, Ky., Rexel does not have a presence in Braid Electric’s trading area, said Ben Gambill. “We operate basically in the middle part of Tennessee and southern Kentucky and they are not in the areas where we operate other than that one location.” Rexel is planning to keep both of the Danville, Ky., locations open and operate them “hopefully successfully,” he said.
The acquisition of Braid Electric follows the recent acquisition by Rexel of five companies in the Czech Republic and Australia (see EM, Oct. 22, 2004, page 1). According to a company press release, “this transaction underscores Rexel’s determination to pursue its selective external growth strategy. This strategy is focused on the acquisition of small- and medium-sized companies, financed through operating cash flow, enabling the group to significantly strengthen its local positions in selected high-growth markets,” it said.
Rexel has 280 locations and 4,400 employees in the United States, and had 2003 annual U.S. sales of $1.9 billion, according to Electrical Wholesaling magazine’s 2004 Top 200 listing. Rexel SA has 1,700 branches and 21,300 employees in 29 countries and approximately $8.2 billion in 2003 annual sales.
The company’s U.S. year-to-date sales through Sept. 30 are up 7.4 percent to approximately $1.5 billion. Its Canadian sales for the same period increased 3.8 percent to $246.6 million. Rexel said the United States represents one of the group’s fastest-growing and highest-potential markets. “The integration of Braid Electric Company will enable the group to complete its regional coverage as well as pursue its development in the residential construction sector, which accounts for an important part of Braid’s activity.
Jean-Charles Pauze, chairman and CEO of Rexel, said, “The U.S. market is highly fragmented and offers numerous opportunities of consolidation for Rexel, which ranks among the sector’s top players. For several months, the U.S. market has shown renewed strength. The integration of Braid Electric fits perfectly in our strategy of high growth and local market share gains. With Braid, the group will reinforce its presence in the southern United States, which enjoys good growth potential.”
In other news, Rexel signed an agreement with Brilliance, a Chinese retailing group, to establish a joint venture in the Shanghai region. Under the agreement, Rexel, which already has a presence in the Beijing region, would expand its position in the Chinese market.