Worthy's build-up strategy for USESI continues with Duplex Electrical purchase

With its purchase last month of Duplex Electrical Supply Corp., Port Washington, N.Y., US Electrical Services LLC (USESI), Exton, Pa., bolstered its growing presence in the Northeast.

Founded earlier this year by Richard Worthy, former Sonepar CEO, US Electrical Services has also acquired several other distributors in New York, Connecticut and New Jersey: Electrical Wholesalers Inc., Hartford, Conn.; Monarch Electric Co., West Caldwell, N.J.; and Wiedenbach-Brown Co., New Rochelle, N.Y. These three well-known companies are all listed on Electrical Wholesaling's 2006 Top 200 listing. Worthy's 2006 acquisitions total more $400 million in sales, 40 locations and 600 employees.

In addition to making these acquisitions, in the past few months USESI has opened a new facility in Fall River, Mass.; signed leases for Massachusetts branches in Framingham, New Bedford, Waltham and Worcester as well as Providence/Cranston, R.I.; leased a 135,000-square-foot facility in Stoughton, Mass., for a central distribution center (CDC); announced plans for a CDC in Hartford, Conn.; and plans to open four new branches in the Boston market in 2007.

By using Electrical Wholesalers as a growth platform to expand into the Boston area, USESI will bring online more than a quarter million square feet of capacity. Carl Brand, USESI's regional president in New England, is responsible for the company's growth initiative in that region. Brand, who was one of Worthy's senior managers with Sonepar, joined USESI in June. He said USESI has quickly recruited quality employees and is already taking orders in its new market areas. “Our backlog is well over $4 million and our Providence, R.I., branch alone is trending to $20 million on an annualized basis,” he said.

According to Marty Mesale, Electrical Wholesalers executive vice president in Providence, “The single most important reason we've been able to move quickly and successfully is Electrical Wholesalers. That company's platform has allowed us to build up our operations in a fraction of the time it would normally take.”

“The basic business models we operate have been honed over the years. Our operational backbone — the processes, technology, back-office functions that we use to service our customers in Connecticut — has matured as our sales have grown,” said John Reznick, president of Electrical Wholesalers. “Because we are of a sufficient size with robust practices, we can scale up.”

An article posted at www.usesi.com said the Electrical Wholesalers platform is helping the company expand not only in northern New England but also within its traditional geographic markets. Reznick is looking at acquisitions and new branches both inside and outside Connecticut.

Worthy is building USESI with a decentralized operating strategy similar in some respects to the one he used to build Sonepar into a billion-dollar player. The company does not have a central purchasing department or a central marketing group.

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