More Acquisitions … Mayer & Lawson Products Canada

The first US acquisition of the second half of the year and the third Canadian acquisition since July 1^st were announced yesterday. Rexel’s Mayer division and Lawson Products, Canada, made acquisitions.

Mayer Electric Acquires Electrical Supplies Inc

, an operating company of Rexel USA, announced that it acquired Electrical Supplies Inc (ESI).

ESI, with estimated revenues according to sources in the southeast Florida market, had revenues of $75-100 million. This two branch (Pompano Beach and Miami) Square D by Schneider Electric distributor was an IMARK member and one of the original members of SIED (Southern Independent Electrical Distributors), the first marketing group (at that time called a buying group) in the electrical industry.

With this acquisition, Mayer Electric now has nine (9) locations in Florida.

According to the Rexel / Mayer press release:

“Mayer, a company of Rexel USA, has announced an agreement to acquire Electrical Supplies, Inc., a leading independent electrical distributor based in Miami, Florida. Electrical Supplies, Inc. was founded in 1976 by Fred Segal, Rudy Hinds, Larry Newland, and Mike Vavrek and quickly established a reputation for exceptional customer service throughout Southeast Florida. That legacy has continued under the leadership of Jim Segal, John Hinds, and Bob Devona since 2008.

This acquisition represents a significant milestone for Mayer, expanding its footprint into the growing Miami-Dade market and enhancing Mayer’s service offering to better support contractors and customers in Southeastern Florida. Electrical Supplies, Inc. operates strategically located branches in Pompano Beach, Miami, and Homestead, positioning Electrical Supplies, Inc. as a leading independent electrical distributor in the region for nearly 50 years.

The acquisition of Electrical Supplies, Inc. aligns with Mayer’s strategic vision for growth and market expansion; while preserving the legacy and commitment to excellence that Electrical Supplies, Inc. has established over the years. Additionally, this acquisition enables Mayer to strategically enter the Southeastern Florida market, which is experiencing robust economic growth fueled by favorable population trends, increased construction activity, and a business-friendly environment.

With the goal of delivering best-in-class customer service and exceptional solutions in Southeastern Florida, Mayer plans to integrate Electrical Supplies, Inc. into the Mayer brand to capitalize on the collective expertise, capabilities and strategic vendor alignment between both businesses.

Roger Little, CEO of Rexel USA, commented on the acquisition, stating, “We are excited to welcome Electrical Supplies, Inc. and all Electrical Supplies, Inc. associates to Mayer. This strategic move aligns with our growth goals and proves our ongoing commitment to strategically invest in Mayer. By bringing Electrical Supplies, Inc. on board, we can expand our reach and continue to provide best-in-class service and solutions to our customers in Southeastern Florida.”

Mike Kidney, President of Mayer, highlighted the importance of the acquisition, saying, “The acquisition of Electrical Supplies, Inc. presents a tremendous opportunity for us to enhance our presence and offering in the dynamic Southeastern Florida market. The complementary strengths of our businesses make this a natural fit, and we are eager to leverage our combined capabilities to drive growth.”

In talking to manufacturers about the acquisition, a number wondered why the acquisition was placed under the Mayer banner rather than the Rexel banner. According to Kevin Gustin, VP Marketing for Rexel, “The supplier alignment was a better match for the Mayer line card, specifically Schneider Electric. Also, Mayer has customers who are expanding into the South Florida market and that combination made ESI a perfect match for the Mayer footprint.”

Reportedly ESI was one of the few dual switchgear distributors in the country and faced a decision between aligning with ABB or Schneider. The company decided to align with Schneider, hence the alignment with Mayer as the Rexel locations are aligned with Rockwell (for automation) and Eaton (for switchgear) in this marketplace, according to the Rexel website.

Canada Acquisition

Another AD Canada member was sold.

Source Atlantic, a multi-trade distributor headquartered in Saint John, New Brunswick with 24 locations, and owned by Ocean Capital, was sold to Lawson Products Canada, an affiliate of Lawson Products, which is owned by Distribution Solutions Group.

Source Atlantic’s revenues were approximately CAD $250 million (about $183 million USD).

Source Atlantic was an AD Canada member and a member of their Electrical group, amongst other divisions.

This makes the fourth AD Canada member acquired in the past 45 days.

Observations

ESI

• The ESI acquisition is a nice pick-up for Rexel as it fits a strategic need for Mayer to enter that market.
• It enables Rexel to offer contractors an alternative brand while also helping Mayer support its customers who are moving into / serving the Miami market.
• The Miami market is a growth area.
• The ESI acquisition is an example of the type of deal that acquirers will evolve to … smaller deals that help them build out their network and gain greater share within a local market.

Source Atlantic

Source Atlantic is an interesting “platform” company. Essentially an MRO distributor given its multi-discipline offering.