EW’s editors had a busy year covering all the news that broke in the electrical wholesaling industry in 2016. Here are our picks for the trends that could shape the business in the years to come.
While some big-name electrical distributors were acquired in 2016, the overall number of acquisitions slows down after a busy 2015. So far this year, 12 full-line electrical distributors were acquired, including five Top 200 distributors. In 2015, Electrical Wholesaling and Electrical Marketing reported on 36 distributor acquisitions from around the world, including six Top 200 electrical distributors.
The biggest acquisitions at press time for 2016 were the purchase of Shealy Electrical Wholesalers, West Columbia, SC, by Border States Electric, Fargo, ND; Graybar Electric’s acquisition of Cape Electrical Supply, Cape Girardeau, MO; the sale of Griffith Electric Supply, Trenton, NJ, to Franklin Electric, Moorestown, NJ; Rexel’s acquisition of Brohl & Appell, Sandusky, OH; and the sale of Grove Madsen Industries, Reno, NV, to Codale/Sonepar North America, Salt Lake City, UT. Last year’s largest acquisition was Anixter’s purchase of HD Supply Power Solutions, Atlanta; followed by Williams Supply, Roanoke, VA (Electrical Equipment Co.); Eck Supply, Richmond, VA (Sonepar North America); QED, Las Vegas, NV; (Sonepar North America); Hill Country Electric Supply, Austin, TX (WESCO); and Needham Electric Supply Co., Canton, MAS (WESCO). For a complete list of electrical distributors’ acquisitions over the past two years, go to page 13.
The trend in rep world toward larger geographic footprints picks up steam in 2016. Several studies by the Farmington Consulting Group, Hartford, CT, over the past few years found that more independent manufacturers’ reps were looking at expanding their operations into contiguous market areas through acquisitions, and said that the day might come when many rep firms were either large regional players or specialists that focused on a specific industry or product area.
That vision took a big step toward becoming a reality with the news this year that several prominent rep agencies were involved in mergers or acquisitions. One Source Associates Inc., Columbia, MD, and Paolicelli & Associates, Carnegie, PA, announced a merger that will operate under the name Paolicelli/One Source in western Pennsylvania and West Virginia. It was big news in the Kansas City market when RB Sales Corp., Marion, Iowa, acquired Precision Electrical Sales Co., Independence, MO, to extend its reach into Kansas and western Missouri. And on the West Coast, Ewing-Foley Inc., Cupertino, Calif., merged with Miller Electrical Sales in Phoenix to build its business in Arizona, Las Vegas and southern Nevada. They will operate under the Ewing-Foley name in those markets. Ewing Foley, one of the largest independent reps in the nation, also has offices in Auburn, Cupertino and Los Angeles, CA; Portland, OR; and Seattle, WA. It covers those states in addition to Alaska, Arizona, northern Idaho, Montana and Nevada.
Across the country, through the merger of Thea & Schoen, Clifton, NJ, and William B. Bleiman & Sons, Philadelphia, PA, these companies will jointly go after markets reaching from the New York metro and northern New Jersey; Philadelphia and its suburbs; and down on through Baltimore, Maryland and Washington, DC.
Several large manufacturer acquisitions make news, but the real story appears to be in smaller deals reshaping the lighting control and industrial automation markets. The biggest manufacturers acquisitions of the year included the sale of LEDVANCE, the Osram-Sylvania lamp business to MLS, a large Chinese semiconductor and electronics company already active in the United States through its Forest Lighting, Atlanta, GA, business; Southwire’s purchase of United Copper Industries, Denton, TX; and Leviton’s acquisition of Brand Rex Ltd., Glenrothes, UK. And some smaller deals involving well-known electrical manufacturers and brands also hit the headlines, including Bridgeport Fittings’ purchase of Cor-Shield; the acquisition of Cadet Manufacturing, Vancouver, WA, by Ireland’s Glen Dimplex; and the sale of NSi Industries, Huntersville, NC, to private-equity firm Blue Sea Capital, Palm Beach, FL. For a complete list of electrical manufacturers’ acquisitions, go to page 15.
But the biggest acquisitions and partnership activity on the manufacturing front was definitely in the areas of web-based lighting control and industrial software, where companies like Legrand, Acuity, Cree, GE, Eaton either acquired companies with expertise in these areas or formed partnerships with them. More details on what’s happening in these market segments in the sidebars on page 14 and page 16.
The Patchwork Economy continues to reflect the wide divergences in growth by region and market sector. As you will see in the 2017 National Factbook on page 20, the economic indicators point to a year of solid growth in single-family housing; a decent year in nonresidential construction; and a sluggish industrial market. The growth prospects in different metropolitan areas also vary widely, with an awful lot of the overall construction activity restricted to a small number of cities, including Boston, MA; New York, NY; Washington, DC; Charlotte, NC; Miami, FL; Tampa, FL; Florida’s Gulf Coast; Austin and Dallas, TX; Denver, CO; Salt Lake City, UT: Phoenix, AZ; Los Angeles, San Diego and San Francisco, CA: and Seattle, WA.
OBITUARIES
The electrical wholesaling industry lost some leaders during the past year and EW’s staff extends their condolences to the families of William Anixter, Anixter International; Stephen Chaika, Slater Electric, Glen Cove, NY; Joseph Colangelo, AFC Cable and Collyer Wire Co.; Ray deSteiger, Ray Electric, Sterling Heights, Mich.; Harold Madson, Border States Electric; and Herb Slater, Slater Electric; and Duplex Electrical Supply, Port Washington, NY.