CX Connexion Joins IMARK

Through today, thirty five electrical distributor deals have been announced (and reported on via ElectricalTrends.) This is more than many can remember in recent history. And, as expected, many were IMARK and AD members.

As expected, many of these distributors were in one of the marketing groups.

We’ve identified that 23 were IMARK distributors with the notable ones being First Source (sold to Win Supply, an IMARK member), Amperage (sold to CED and remaining in IMARK) and Wiseway (to a PE firm but staying in IMARK). The only “significant” size company to change was YESCO, which was sold to Schaedler Yesco.

Five of the small IMARK distributors that were sold were sold to Green Mountain Electric Supply, an AD member, as GMES seemingly is “rolling up” western / upstate New York.

We’ve identified 3 AD members that were sold, representing membership loses to the group – Horizon Solutions (to Rexel), Rockingham Electric (to Northeast Electric / Sonepar) and, most recently, CX Connexion (to Graybar).

Last week, IMARK announced that CX Connexion would be leaving AD and joining IMARK.

Reportedly AD considered modifying its membership guidelines to accept independently operated businesses of other national chains. Given that CX Connexion was acquired by Graybar’s North American Subsidiaries group, and hence will operate independently, the company could join a group or remain independent.

Some felt that AD could change its definition of “independent” given the acquisition cycle, that CX Connexion prior ownership (which is staying involved in the business) has a good relationship with AD executive management, and that CX Connexion was utilizing AD eContent for its website.

The decision was made otherwise. CX Connexion changed groups, will need to seek a different eCommerce content provider but, the rebate relationships will have little, if any, affect given the commonality of suppliers between the groups.

IMARK broadened its membership guidelines in the late 1990’s, recognizing that business models would evolve and that there were benefits for independently operated businesses to share ideas and benefit from mutually negotiated rebate relationships. The first company that participated under this model was Avon Electric, which had been acquired by WESCO. This was followed by Branch Electric, when it was acquired by Rexel.

Today, some CED (Nu-Lite, Amperage, perhaps others) and Graybar (Cape Electric, Metro Electric and now CX Connexion) businesses are members of IMARK.

Given acquisition trends, local electrical buying dynamics, brand preference (relationship allegiance) and other reasons, it would not be a surprise to see other independently operated businesses be members of groups. It may be the “best of both worlds.”