City Electric Expands Solar, Acquires Soligent
City Electric, the Texas-based, $1 billion plus electrical distributor with over 525 locations, and seemingly another location opening every week, throughout the country continued the rash of recent electrical distributor acquisitions, this time with a twist.
The twist is that City Electric is expanding its solar offering via the acquisition of Soligent.
Soligent is a national solar distributor supporting over 5000 “dealers” throughout the country from four distribution centers. Soligent’s revenues exceeded $100 million dollars. According to the press release, City’s Renewables group will now become part, or report to, Soligent.
While Soligent may pale in size to CED Greentech and perhaps other initiatives from WESCO and a few others, with City Electric’s branch network, the company could be poised for significant growth.
With solar, and more broadly “renewables” growing in importance as an alternative energy source and, perhaps more importantly, a climate control technology, this is a significant strategy move for City and replicates similar moves City’s parent has implemented in our regions throughout the world.
Further, from a strategic viewpoint, solar, and renewables, will be receiving some monies from the recently passed infrastructure program as well as utility initiatives to diversify their energy sources.
The press release stated,
“Electrical wholesale distributor City Electric Supply Company (CES) and solar equipment distributor Soligent have signed an agreement for CES to acquire 100% of Soligent, including its solar distribution, engineering services, and project financing business. The transaction is expected to close at the end of November, subject to regulatory and other approvals and conditions.
“This agreement enables us to focus on delivering even more innovative solutions to the solar energy market,” said Soligent CEO Jonathan Doochin. “We appreciate the entrepreneurial culture of the CES team and we’re confident they’ll provide the right environment for our talented team to accelerate our vision to make a positive impact on the world through renewable energy.”
“We are committed to providing access to renewable energy equipment and know Soligent shares our passion for delivering best-in-class experiences to customers,” said Thomas Hartland-Mackie, CES’s President and CEO. “We are excited to team up and advance our shared goal to provide sustainable options to our communities through our combined expertise and experience in the residential and commercial solar energy space.”
Following the close of the transaction, Soligent will be a subsidiary of CES. Soligent will take on leadership of CES’s Renewables division and work closely with its extensive branch and distribution network to provide a wide range of solar product offerings. This will further accelerate the companies’ over 50% growth rates to date.
Hartland-Mackie added: “We are eager to explore untapped opportunities and leverage our complementary businesses to provide exciting new offerings to customers.”
This transaction comes on the heels of a strategic acquisition in the UK, European, and South African markets. In October 2021, the owners of CES acquired Segen, a leading global wholesale distributor of residential and commercial rooftop solar PV systems, and its subsidiaries in the UK, Germany and South Africa.”
Takeaways
- Based upon feedback from the NAED Eastern, the acquisition market is ripe with opportunities for many reasons and there are more acquirers than ever … from national chains to regional independents. And many want to complete a deal by the end of the year.
- The infrastructure bill creates expanded opportunities that will last over the next seven to eight years. Distributors can position themselves to take advantage of these and other secular opportunities.
- Moving forward, distributors should consider diversification opportunities. In fact, diversification and climate technologies are two of the ten areas we recommend distributors invest in to prosper over the next 3-5 years.
Question … what are your takeaways from an acquisition market that is quickly changing the electrical distribution landscape? Do you know what your play is?