We heard it yesterday from a manufacturer but waited till it was public (and we could source it). Richard Worthy is back into the distribution game.
According to TED Magazine, his latest acquisition vehicle, AMP Electrical Distribution Services, is acquiring Leff Electric, which is based in Cleveland, OH.
It’s not surprising that Mr. Worthy has acquired an electrical distributor as many have heard of his interest to return for the past 18 months. Reportedly he solicited opportunities in the Texas market as well as the Midwest. Leff is an interesting distributor to be a “platform company for future growth and expansions” for AMP as:
- Cleveland (yes, Cleveland) has the potential to be a growth market due to access to the Utica Shale (natural gas and oil) market as well as Leff can reach into western PA and other surrounding areas for the Marcellus Shale markets.
- Leff is a strong contractor-house with a good project group
- The company recently (last month) launched a new website showcasing its’ Energy Solutions group (growth opportunity) as well as its National Account (lighting-oriented) group.
In emphasizing a “platform”, presumably this means that they have identified acquisition targets (and may be talking to them) in contiguous markets, which is a strategy that Worthy utilized when he first started making acquisitions for Sonepar years ago.
In speaking with a manufacturer yesterday, they asked for my thoughts (and I refrained) but shared some of their thinking (which is incorporated below along with some other questions):
- “An individual who has invested into a rep firm now owns a distributor … What is the “wall” to prevent them from using information from the lines the rep represents on behalf of the distributor?”
- Leff, according to its website carries Leviton, P&S, Hubbell, Watt Stopper and Wiremold
- And it begs the question, how will other local P&S, Watt Stopper and Wiremold distributors respond (and the reps).
- Leff has been a stalwart AD distributor however AD historically has not allowed acquired companies to remain in the group (unless acquired by an AD distributor). This is not the case with IMARK as USESI, which was started by Richard Worthy, became an IMARK member. Could we hear that effective November 1, Leff (or AMP) is an IMARK member?
- Whom is “next”?
- there may be a “wall” or an agreement that prevents sharing of the information
- he could be solely a financial investor and therefore not have access to the detailed level of information
- he will make other acquisitions (don’t know if it is his money or he is being backed by a private equity firm)
- since “he” will control “spend”, manufacturers will want to continue to sell products to / through distributors he owns.
- Border States acquired Utilicor and EWS
- Crescent acquired Interstate Electric
6 Comments
I can not believe this one.
USESI was started by other peoples money and was not built from ground up it was built by acquisition. Show me a company or a manager who actually built a company from nothing and I would be impressed. What happened to USESI it was sold because it was burning through other peoples money. THANK YOU
wonder if the P&S rep is concerned. If I’m leviton, I’d be concerned about P&s now getting all of my pricing information.
His rep firm and new distributor are both registered to attend the NAED Eastern Region meeting. This should be interesting,–
As a manufacturer, I want to hear how the two companies are being operated, his level of involvement and the level of information sharing. I expect to hear that everything is separate, but I need to know specifics before I have confidence.
Any former sidekicks from sonepar or usesi working with Richard at AMP electric?
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