The recent acquisition of United Structural Products (USP) (known by its brand, US Tray) by Atkore helps Atkore expand its tray offering by bringing aluminum and 316 stainless steel welded tray to complement Cope’s steel, fiberglass and aluminum offering inclusive of its exclusive swaging process. US Tray is also known for their “made to order” capabilities.
Already a leader in conduit, armored cable and PVC conduit, the addition of US Tray provides distributors another full-line resource.
United Structural Products (US Tray), was founded in 2010 and is known for being responsive to distributors with quality customer service and the ability to be nimble. While lacking national electrical and utility market coverage and electrical marketing group participation, Atkore will be able to help scale its rep network and participate in groups while also bringing resources to help expand production (as needed) and serve a larger distribution network.
Atkore’s press release
Atkore International Group Inc. (“Atkore”), today announced that it has acquired the assets of United Structural Products. (“USP”), a manufacturer of welded aluminum and engineered-to-order cable trays that are built per NEMA standards and certified by Underwriters Laboratories (UL).
“The acquisition of USP is consistent with Atkore’s statements on pursuing complementary acquisitions in support of the company’s strategic growth plan. This transaction strengthens Atkore’s position as a leader in the cable tray industry,” commented Peter Lariviere, Atkore President of its Cable Solutions business unit. “Atkore’s focus on serving customers is further enhanced with a comprehensive range of cable management solutions under the market-recognized brands of Cope and US Tray.”
Dana Black, co-owner of USP, added, “USP has built a strong reputation for producing quality products supported with exceptional customer service. These are the same traits valued by Atkore, and we’re proud our contributions have been recognized.”
Mr. Lariviere confirmed that Dana Black and co-owner Tom Meredith will remain with the company in leadership roles as they support Atkore organization’s continued focus on serving electrical products customers.
USP is headquartered in Atlanta, Georgia and will continue operating at their current location under their flagship brand of US Tray.
The expanded offering will help Atkore participate in the expanding tray market being driven by lighting renovation, low voltage initiatives (datacom, connected lighting, PoE, IoT) and the explosive growth of data centers.
According to Manta and Buzzfile, it appears that USP’s 2018 revenues were less than $10 million (although this has not been confirmed / denied by either USP or Atkore.) The acquisition price has not been shared.
While post-acquisition decisions will need to be made regarding policies, reps, brand, personnel and more, these are areas that inevitably take time.
This acquisition is a nice, additive, acquisition and fills a product gap for Atkore. At the same time, this announcement highlights that there is an active manufacturer acquisition market given some Southwire deals earlier this year, NSi’s acquisition of Platinum Tools, IDEAL acquiring Cree, a number of other lighting deals and some that are rumored pending or in due diligence. We’ve also seen/heard of private equity interest in the market either through new entrants or owners of industry companies looking to fund expansion.
Why is the acquisition market active?
There is a convergence of:
- inexpensive funding sources
- the need for publicly held companies to grow
- private equity companies have a need to deploy capital
- private equity companies that own electrical manufacturers have a need for these companies to get bigger so that they can flip them
- distribution consolidation is a continuing trend
- the need for size to improve the ROI on technology and other investments
- companies need new growth paths, hence acquisitions expanding their offering to capture greater share of distributor spend
- and more are driving interest.
And it can take time for some of these relationships to flourish, which is why many introductory discussions are held … no one knows when the timing may be right.
Takeaways
As a distributor this deal enhances another quality supplier in the tray market. The question then becomes, whom becomes your partner or do you select multiple?
As a manufacturer, it’s a reminder that if you “stay still” your competition may not. It’s an example of a large company maybe being able to add “gas” to a quality small company to significantly accelerate growth. Product development, either organic, outsourced or acquired, is integral to growth. A “large” acquisition (a la IDEAL and Cree or ABB and GE Industrial Solutions) is one way to go. Another is finding smaller, nimble (as in the case of US Tray) companies that can be “plugged” into a platform. Either way, new products are needed to win.
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