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Illustration 60886103 / Kheng Ho To / Dreamstime
Illustration 60886103 Kheng Ho To / Dreamstime
60886103 / Kheng Ho To / Dreamstime

Acquisition of Cape Electrical Supply Brings Graybar Industrial Construction Expertise

July 8, 2016
"For us, it’s going to give us the best of both worlds. We’re going from a small independent to part of one of the largest electrical distributors in the North American market." Kyle Thoma, Cape Electrical Supply

Graybar Electric, St. Louis, will add one of its neighbors to its nationwide network of branches with an agreement to acquire Cape Electrical Supply, based in Cape Girardeau, Mo. Terms of the deal were not disclosed.

Cape Electrical Supply is a regional distributor serving electrical contractors and large engineering construction firms, as well as industrial, institutional and utility customers. The company was founded in 1953 and has grown to 17 locations in Missouri, Illinois, Kentucky, Tennessee, Arkansas and Alabama. It reported revenue of $125,881,000 million in 2015 according to Electrical Wholesaling. The company will operate as a subsidiary of Graybar under the Cape Electrical Supply name with the same employees, leadership team and suppliers.

Cape has been owned by private equity firm Svoboda Capital Partners, Chicago, since 2007, and the move to sell to an electrical distributor of the size and reputation of Graybar made for an ideal transition, said Kyle Thoma, president and CEO of Cape Electrical Supply, in an interview with Electrical Marketing.

“There were a lot of good reasons this is a good fit,” Thoma said. “We fill a lot of white space for them, in-between their existing markets. They love the Cape Electric brand, we’re a well-run organization, a profitable organization, and they’re going to leave us as such, as a subsidiary of Graybar. For us, it’s going to give us the best of both worlds. We’re going from a small independent to part of one of the largest electrical distributors in the North American market. We’ll have access to lot of synergies across the board in logistics, inventory and investments for growth that smaller independents sometimes struggle with. Even the marketing functions of the business. We’re a decent sized independent, but we never had a marketing department before. Now we have access to a top marketing department.”

Cape Electrical Supply has some expertise to share with Graybar as well, especially in its industrial construction division, CESI (for Cape Electrical Supply Integration), that provides a significant portion of the company’s sales. CESI works with EPC firms (engineering, procurement and construction) which are essentially general contractors that perform their own electrical work and rely on CESI to provide value-added services such as project management, procurement and packaging in a turnkey solution.

“That’s a value-add to the customer that Graybar could build on,” Thoma said.

“We are excited to welcome the Cape Electric team to Graybar and look forward to achieving profitable growth together,” said Kathleen Mazzarella, Graybar’s chairman, president and CEO, in a release. “This marks the second acquisition for Graybar in as many years, and we will continue to seek out similar opportunities to expand our reach and diversify our business in the future.”