Giving it a stronger foothold in the original equipment manufacturer (OEM) market, WESCO International Inc., Pittsburgh, has agreed to purchase the Carlton-Bates Co. in an all-cash deal for $250 million. WESCO will have $20 million in escrow for 30 months in case any adjustments need to be made to the purchase price.
Carlton-Bates, Little Rock, Ark., specializes in components such as switches, relays, diodes, relays, contactors, motor starters, fuses and cable. The company also offers a broad line of industrial controllers, programmable logic controllers, industrial input/output systems, programmable communicating counters, and industrial workstations. Carlton-Bates distributes products from more than 300 manufacturers and inventories more than 80,000 parts.
Roy Haley, WESCO’s chairman and chief executive officer, said he was pleased with the prospect of combining Carlton-Bates into WESCO’s position in the electrical distribution market. “This important acquisition provides a unique opportunity to more deeply penetrate the original equipment manufacturer market segment with specialty products, applications and value-added services,” he said. “Carlton-Bates has an effective and proven marketing strategy to the OEM market and has a track record of growth and responsive customer service.”
Carlton-Bates has annualized 2005 sales of about $300 million and has 32 branch offices and four regional warehouses in 17 states, including one in Pennsylvania. The company serves an estimated 20,000 customers throughout the United States and Mexico. Its core markets are in the Southeast, Southwest and Midwest.
Dan Brailer, WESCO’s treasurer and director of investor relations, said Carlton-Bate’s OEM orientation would fit well with WESCO’s MRO orientation in construction.
Brailer said WESCO has 350 branches and Carlton-Bates has 32 branches, but he could not comment on any plans for efficiencies or consolidations of branches. The deal is expected to close Sept. 30.
Separately, WESCO completed the acquisition of Fastec Industrial Corp., Elkhart, Ind. Fastec, with annual sales of about $55 million, is a national importer and distributor of industrial fasteners, cabinet hardware, and locking and latching products.
WESCO had 2004 annual product sales of about $3.7 billion.