Many have talked about the potential for a number of acquisitions to occur in the industry by the end of the year. This is driven by generational change, a strong past couple of years profit wise as well as stress created by COVID, the need for technology investments, personnel recruitment and retention strategies as well as the desire by companies to increase their scale, to diversify and position themselves for the future. So, reasons to want to get out and reasons to want to grow.
This week there were six deals reported, in various stages.
- Two distribution deals were finalized – McNaughton-McKays’s acquisition of Caniff and its subsidiary’s acquisition – Reynolds Electric acquisition of Midcoast Electric
- Two distributor acquisitions were announced – Green Mountain Electric Supply acquired two distributors in New York – Dunn Electric and Jamestown Electric. GMES now has 20 locations in Vermont, Maine and New York and is becoming more of a regional player.
- Southwire diversified and acquired a software company, OBI Partners, focused on the utility space. This is a services play for the company and will bring new opportunities for the company in a segment that should be a growth area given upcoming infrastructure investments
- And there appears to be another deal waiting on the horizon as a name brand manufacturer advised the industry, through its reps, that its warehouses are closed today for inventory. While nothing is wrong about closing for inventory, but mid-month? And rumors are rampant about who is in play and the companies that were in discussion with them. But we’ll wait for the official announcement.
While time may be running out to close deals by the end of the year (which some tell us is desired for tax reasons) there are others that are in discussions. Many companies are looking to make acquisitions, but this doesn’t mean that they will spend unwisely.
More are sure to come.
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