Crescent Heads South … Grabs a Peach

Crescent Electric notched the electrical distribution industry’s 20^th acquisition since July with its agreement to purchase Lowe Electric.

Lowe, based in Macon, Georgia and listed as Electrical Wholesaling’s 62^nd largest distributor in 2021 (and, according to sources, 2021 revenue was a little over $100M with on-track for about $130-140M), was also an AD member. Crescent Electric is an IMARK Electrical member.

Presuming that the Lowe sales estimate is accurate, Lowe was / is 8-9% of Crescent’s size (using EW 2021 data.)

Crescent Press Release

“Crescent Electric Supply Company, one of the nation’s largest independent distributors of electrical hardware and supplies, today announced it has closed on a transaction to acquire Georgia-based Lowe Electric Supply Co. Financial terms of the deal were not disclosed.

This deal allows both companies to provide customers with an increased breadth of services across their served industrial and construction business segments.  The combined entity also enables customers to benefit from more products, services, and solutions through an enhanced geographic footprint.  Lowe serves customers out of 13 locations across Georgia and South Carolina.  Prior to this deal, Crescent operated out of more than 140 branches in 26 states, however, it did not have any branches or employees in Georgia or South Carolina.  Combined, the company will operate out of more than 150 branches located in 28 states nationwide.

“Lowe is well known and highly regarded throughout Georgia and South Carolina, and we welcome them to Team Crescent,” said Scott Teerlinck, President and CEO of Crescent.  “Their strong track record of exceptional customer service provides a solid base to accelerate future growth for both Crescent and Lowe by expanding our market presence and service offerings for new and existing customers.”

Lowe will continue to operate under its founder-led management team and be supported by the Crescent platform.

“We know the Lowe business is in excellent hands with Crescent, and it’s exciting to now be a part of a Top 10 electrical distributor,” said Jim Kinman, President of Lowe Electric.  “Both Lowe and Crescent have long and deep family roots.  We were founded in 1903 by Henry Lowe, and Crescent was founded in 1919 by Titus Schmid.  Both sets of families are still involved in their respective businesses, and both cultures benefit from these family legacies.  This is a great day, as we write a new and exciting chapter for our company, as well as our employees, customers and business partners.”

The Lowe acquisition is yet another element in a larger strategy by Crescent to make investments in itself to better serve customers.  Crescent’s ongoing transformation also includes improvements to its operating footprint, digital transformation, and enhancements to supplier partnerships, among other strategic elements.

“We recognize how customer expectations and buying behaviors are shifting,” said Teerlinck.  “We are embracing these changes as opportunities for Crescent to make strategic investments to better meet, and even exceed, these new and changing expectations.  It’s an exciting time to be a member of Team Crescent, and we welcome our new teammates from Lowe to join our effort and bring their ideas and best practices to help us deliver even stronger business outcomes.”

Thoughts About Crescent and the Lowe Deal

• Crescent has made some “good-sized” acquisitions over the years (Stoneway, Womack) and in both cases they kept the brand name, invested into those companies and have grown the business. Given that background, and Lowe’s size and footprint, Crescent will continue the pattern and be the “brand behind the bran” (in other words, Lowe Electric, powered by Crescent Electric.)
• Given Crescent’s investments, and accumulated expertise, in RDC operations, enhanced digital transformation, efforts for eCommerce and more, this will help further improve the Lowe’s operation.
• Lowe’s 13 locations are in more secondary / rural markets which is more culturally aligned, and probably profitability-aligned, with Crescent. It wouldn’t surprise me if Lowe, which conducted an exhaustive process and had a number of suitors, selected Crescent for the cultural fit rather than going for top dollar. (But, at the same time, sources say that the deal required “aggressiveness”.) At some point, cultural fit, for the family, outweighs the incremental dollars. This is a guesstimate as Sonepar and Rexel have recently been very aggressive (some say “stupid money”) with some of their deals.
• Crescent’s recent RDC investments, technology investments, staff investments (and culture building) and industry engagement all highlight the company’s focus on growth. Initially it was from an organic viewpoint. The Lowe acquisition highlights that they are willing to be opportunistic and the company’s leadership has a vision for the future for accelerated growth … and will spend the money to do it.

Congratulations to Jim Kinman at Lowe for building a quality company and to Scott Teerlinck at Crescent on the acquisition.

And whoever did the Crescent / Lowe joint logo should be congratulated for a creative logo design to support an acquisition announcement … sets a new standard for others!

So, who will be deal #21?