Houston, We Have Another Distributor
Most have heard the 1970 phrase “Houston, we have a problem” and now we have another distributor coming to town.
After acquiring Mustang Electric last year and reportedly seeking to acquire someone in Houston, Mayer Electric is moving into Houston. The Southeast’s largest independent regional distributor is making a major move in the Dallas market. Interestingly, the first move is hiring the ex-president and ex-svp sales for Wholesale Electric, one of Houston’s premier distributors. Since making this move we understand that they’ve hired (or are in the process of hiring) some people away from other leading distributors and have leased a building (ex-Summit location).
Some thoughts …
- Mayer is willing to spend much money to develop a presence in Houston after not being able to make an acquisition. Senior managers from other distributors don’t come cheap.
- For two senior managers from Wholesale to leave, it makes one wonder about changes at Wholesale Electric.
- Given their prior roles, we presume others from Wholesale may join them as it is not unusually for a manager to seek to bring some of their people with them.
- We understand that Mayer and Dealers, both AD distributors, used to do much networking together and had a close relationship. We don’t know if the personal relationship is damaged, but the moral of the story becomes “be careful of networking too much with next door neighbors, they may decide to move into your house!” Reportedly Dealers is not overly pleased having Mayer in Texas (and perhaps there was a tacit understanding not to play in each others’ backyard.)
While Houston is a large market and the petrochem market has been going strong, the market is served by Reynolds, Elliott, Summit, Dealers, CED, Graybar, WESCO, Rexel, Gexpro, Wholesale and a number of other smaller independents. It’s a very competitive market that is also the gateway to export business (South America and the Middle East). Mayer will further enhance the competitive environment on the Gulf Coast.