SJE, a system integrator, expands to New England

It’s not often that the acquisition of a distributor’s “customer” would be newsworthy from a national scale but SJE’s recent acquisition of Horlick, a New England based system integrator caught our attention.

Why? Because the acquirer, SJE, is also owned by a private equity firm that has acquired a few different electrical distribution companies AND SJE owns a number of other integrators, is focused end-user markets, which then begs the question of “an integrator roll-up?”

And for those looking for an exit, this is another private equity firm that has historically expressed interest in the industrial / construction space.

With the industrial segment seeming to be a growth engine due to companies re-shoring and expanding for more domestic capacity, it becomes an interesting opportunity.

The press release from SJE states:

“SJE Inc. is excited to announce that it has purchased Horlick Company, effective March 31, 2022. Horlick ownership recognized that, in order to grow the company and meet customer demand, they needed to find a business partner with additional specialized functional skills and financial resources to invest in the business. SJE is excited to be that partner and to work with Horlick in a mutually beneficial relationship.

“We are excited to welcome the Horlick team to the SJE family.  They have built a tremendous business, and we look forward to combining our resources to accelerate growth plans for both organizations,” said Dave Thomas, president and CEO of SJE.

Over the past twenty years, Horlick has established itself as a leading manufacturer of custom control panels and motor-generator sets.  Horlick’s commitment to quality and excellent customer relationships will help SJE grow their presence in Massachusetts and the surrounding area. In return, SJE offers additional technical resources and manufacturing capabilities that will augment Horlick’s current capacity and provide access to a broader product offering.

While the acquisition provides growth opportunities for both companies, in many ways it is business as usual. Horlick will continue to operate out of the current facility in Randolph, Massachusetts, marketing under the Horlick brand. Shawn Hennessey, who has managed the day-to-day business for the past 27 years, will continue as Director of Operations.

“We selected SJE due to their similar culture of taking care of their customers, expanded technical resources and their commitment in growing Horlick,” said Hennessey.

SJE looks to partner with companies that have talented employees, opportunities for future growth and a proven track record of strong performance that aligns with SJE’s culture and values. In 2021, SJE acquired two companies: L. W. Allen, based in Wisconsin, and Ohio Electric Control, based in Ohio.

Horlick Company

Founder William Horlick started the company in 1936, and was mainly involved in the buying, selling and refurbishment of surplus military equipment, including motors, generators, transformers and switchgear. Today, Horlick Company has transformed into a complete system integrator capable of supplying a range of equipment, from a simple relay-based duplex pumping station to a complex motor control center with custom PLC-based process and SCADA interface. To learn more, visit www.horlick.com.”

From some local insight and research we gathered and conducted regarding SJE and Horlick:

• Horlick is a system integrator that offers turnkey solutions to variety of automation customers via Custom Control Panels and adjacent services. Strong presence in New England with many loyal customers across the country. The company depends on highly integrated relationship with reps and key suppliers/distributors. Operating out of New England, its core competencies and expertise in automation technologies offers unique advantages to high end OEM’s that are global and seeking agilities and scalability that can align well with their ambitious business plan. Horlick’s goal is to be the best partner to these OEM’s and make a difference that impacts their bottom-line positively in a fast-paced environment.
• Key end-user markets are Food & Beverage, Laser Equipment, Warehouse And Fulfillment Centers, Metal Stamping, Pump Controls, Vacuum Furnaces, Water Treatment, Pool Controls
• Key control lines are Rockwell Automation, Schneider Electric and Siemens
• SJE also owns other integrators, and ma focus on municipalities and industrial water controls. Horlick’s expertise in the automation space complements other businesses and opens many new avenues for expanded growth and partnership. Could SJE be targeting specific verticals to be the “go to” integrator in these industries or is it focusing on supporting key customers or seeking geographic coverage? SJE, or perhaps the individually owned companies, could be targets for manufacturers to service nationally (or at least locally). Here’s a link to their six other “brands”.
• The company is owned by Audax Private Equity which also owns other companies in the electrical space such as EIS and GCG (Genuine Cable Group). Click here for their other industrial Services & Technologies companies. They had owned Kurt Versen (lighting), which was sold to Hubbell in 2008 and RESA Power which they invested into in 2011 and exited in 2017 when they sold it to Blue Sea Capital (the company that previously owned NSi.)

SJE, and Horlick, highlight why manufacturers and their sales organizations (direct and indirect) need to have discussions about pursuing these types of organizations that do business outside of their geographic area and are specialists. How best to pursue them? What other integrator opportunities are out there that are vertically focused?

As the distribution and manufacturing sectors evolve, so is the contractor / system integrator sector and the potential for larger companies to serve larger companies if they can deliver the necessary specialized services.