Graybar Acquires CX Connexion. Deal #26 Since July

Graybar expanded its presence in the Chicago market with the surprising announcement that it acquired CX Connexion.

According to the press release:

“Graybar, a leading distributor of electrical, communications and data networking products and provider of related supply chain management and logistics services, today announced that it has completed the acquisition of CX Connexion, based in Buffalo Grove, Ill.

CX Connexion is an electrical distributor that serves construction, commercial, institutional and industrial customers, with specialized capabilities in lighting and equipment design and a comprehensive solutions platform. The company was founded in 2007 and operates two locations in the Chicago area. As a subsidiary  of Graybar, the company will continue to operate under the CX Connexion name with the same leadership team, employees, and suppliers.

“We are excited to welcome the CX Connexion team to Graybar,” said Kathleen M. Mazzarella, chairman, president and chief executive officer of Graybar. “With its positive reputation and extensive service capabilities, we believe the acquisition of CX Connexion provides a solid foundation for accelerating our growth in the Chicago market.”

“CX Connexion and Graybar have similar core values, a shared focus on innovation, and a commitment to the future of our industry,” said David Rosenstein, president and chief executive officer of CX Connexion. “Becoming part of Graybar allows us to preserve the strengths of our culture, while expanding our ability to serve customers, invest in growth and position our company for long-term success.”

Observations

• Graybar, listed as the 3^rd largest electrical distributor in 2021, acquired the 77^th largest distributor. CX Connexion’s ranking would provide estimated 2021 revenues of $110-115M for this contractor-focused electrical distributor who has two locations in the Chicago market.
• The acquisition was reportedly made through Graybar’s North American Subsidiaries group and will retain the CX Connexion name and independence. This helps Graybar capture incremental share in the Chicago market.
• While Connexion is a Schneider distributor, it is presumed that the Graybar Chicago operations and Connexion pursued different segments of the market, making this acquisition a nice complement to Graybar’s operations.
• From a Schneider viewpoint, this acquisition helps keep them aligned with a strong Schneider supporter who will presumably make the necessary investments to accelerate growth in targeted customer markets.
• Connexion was an AD member. It is unknown if AD will adjust its policy and allow a division of a national chain to remain in the group. David Rosenstein, president of CX Connexion, has a good relationship with Bill Weisberg and many AD members. Perhaps AD will be looking at the acquisition market and say, “we want to retain the revenue?” Graybar could, rather easily, retain the rebate revenue via other means.
• This is David Rosenstein’s second divestiture in the electrical industry. Some will remember that David was the owner, president and CEO of Brook Electrical, which he sold to Sonepar in 2006. After an appropriate time, he purchased Classic Electric, renamed it CX Connexion, and since grew the business over he past 15 years. According to sources David plans to continue to be involved in the business. Congratulations David on your success.

With the Amperage and CX Connexion sales, Chicago is quickly becoming very much a national distributor city.