Rexel and U.S.-based private investment firm LKCM Headwater Investments, Fort Worth, TX, have signed an agreement for LKCM Headwater to acquire the Gexpro Services business from Rexel.
The transaction is expected to close in the first quarter of 2020, subject to the satisfaction of certain conditions precedent.
According to a Rexel press release, “The transaction will provide enhanced development opportunities for Gexpro Services, which has been a non-core activity run independently from Rexel’s core Electrical Distribution business. The Gexpro banner remains a core element of Rexel USA’s electrical distribution business. This divestment will enable Rexel to focus its resources on its core strategy, including the U.S. electrical distribution business and digital transformation across the Rexel Group, and also to accelerate its deleveraging, in line with its capital allocation policy.”
Gexpro Services, which was acquired by Rexel as part of the GE Supply acquisition completed in Aug. 2006, provides integrated customized supply chain solutions centered around C-Part products (fasteners, fabrication, mechanical and electrical) primarily to high specification OEM industries (power and renewables, technology, transportation, aerospace, etc.), according to a Yahoo Finance post. With approximately 400 employees, Gexpro Services generated sales over the last twelve months through Sept. 2019 of an estimated $260 million, mostly in the U.S. The Gexpro Services division has 15 U.S. locations, as well as branches in China and Hungary. Rexel lists 116 other Gexpro branches in the United States, on www.gexpro.com.
Patrick Berard, Rexel’s CEO, said in the release, “Under LKCM Headwater, Gexpro Services will become core and will benefit from a new owner with extensive specialty, value-added distribution experience to add investment and focus, driving continued growth and high levels of customer service. This divestment, which follows a disposal program of €650 million euros in 2017 and 2018 (approximately $722 million), is in line with our strategy aiming at optimizing our portfolio with targeted divestments or acquisitions, to continue refocusing on our core business, and create further value.”
Jefferies LLC served as financial advisor and Sidley Austin LLP served as legal counsel to Rexel.