Southwire Adds to Board, Two Tied to Electrical Industry

Southwire, ostensibly the US’s electrical distribution wire and cable leader, announced that it added four people to its board of directors.

The four individuals are:

• Karen Carter, Chief Human Resources Officer and Chief Inclusion Officer for Dow
• Richard Holder, formerly President and CEO of NN Inc who also was in leadership roles with Eaton. According to the press release his expertise is in business transformation, inclusive of mergers and acquisitions.
• Halsey Cook – President and CEO of Milliken & Co. Halsey has extensive experience in the electrical industry as he was president and CEO with Sonepar USA and previously led Legrand North America.
• Vern Nagle – Executive Chairman of Acuity Brands.

The stated reason, according to the press release, for the industry expertise is according to Rich Stinson, Southwire’s president and CEO ““As we move forward on our journey to become a diversified electrical company, we believe the collective experience and expertise of these influential leaders will prove invaluable for our organization, and we are confident that their insight and input will contribute to the future growth and success of our business.”

In considering the individuals and Southwire’s track record of acquisitions (we predicted Southwire as he next industry aggregator two years ago), most recently Madison Electrical Products and two small companies (and its expansion into tools), perhaps these additions to the BOD infer:

The company’s recent acquisitions, and perhaps operational model, are getting ready to, or could benefit from, “business transformation”.

It’s obvious that Southwire is focused on acquisitions and perhaps positioning for bigger acquisitions that could be transformative.

That future acquisitions could be in the:

• Lighting space and perhaps more so towards “contractor grade” lighting that is retrofit focused (since this is the growth segment of the lighting market vs the new construction segment).
• Wiring device space or other segments that “connect” to wire and perhaps are “niche” offerings, or
• Given Halsey’s distributor background, into other construction offerings and they want to tap into contacts with senior management at manufacturers (after all, private equity outreach works with selected companies – those who are looking to sell.)

Further, this could be an early indicator to Southwire manufacturer reps given Southwire’s recent acquisitions. Southwire acquires and then seeks, and sometimes “more”, to aggregates lines with a common rep. This can be accretive for a rep or can be disruptive to their line card. Only time will tell.

If you are a distributor …

• How does Southwire perform for you?
• What do you think of them as an industry aggregator?
• What (or who) should they buy next?

If you are a Southwire rep …

• Your thoughts on Southwire adding to / changing your line card? (and you can respond anonymously or reach out to us.)

And, in general, thoughts on accelerated consolidation of manufacturers?