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Rate of Electrical-Distributor Mergers, Acquisitions Slows

Oct 1, 2001 12:00 PM, By EC&M Staff

The surge in distributor acquisitions over the past few years slowed significantly in the first six months of 2001, with only 13 companies announcing acquisitions of electrical distributors, according to a recent edition of Electrical Marketing.

In contrast, 45 electrical distributors were acquired throughout all of 2000, 38 of which came in the first six months. Industry observers say the economy may be the main reason behind the slowdown in merger and acquisition (M&A) activity, as companies focus more on containing costs in a bear market than on growing by acquisition.

However, several companies with a history of making acquisitions weren't deterred by the recent economic downturn. Acquirers in recent months include Graybar Electric Co., St. Louis; Rexel Inc., Dallas; Sonepar USA, Berwyn, Pa.; and WESCO International Inc., Pittsburgh.

WESCO continued to expand into the utility market, acquiring Herning Enterprises, Haywood, Calif. Sonepar expanded its already significant presence in two areas: Miami and the Baltimore-Washington metropolitan area. It acquired Del Electric Supply, Gaithersburg, Md., through Capital Lighting and Supply, Alexandria, Va., and Richards Electric Supply Co. in Miami.

The Baltimore market continues to be a hotbed of acquisition activity, as one of the largest independents in the area, Commerce Electric Supply Inc., was acquired by Rexel. Other big acquisitions in the Baltimore area in recent years include Rexel's purchase of The Branch Group, Upper Marlboro, Md., and the purchase by Hagemeyer NV, Naarden, Netherlands, of Tristate Electrical and Electronic Supply Inc., Hagerstown, Md.

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