Acquisitions … for Manufacturers, Distributors, and Reps Continue

The electrical industry continues to consolidate. Three more acquisitions were announced last week and there were a couple of manufacturer deals from last month that we haven’t gotten to comment on.

Manufacturers

Three deals:

Legrand Acquires Power Bus

Last week Legrand acquired Power Bus Way, which will become part of Legrand’s EWS division. A number of EWS’ reps currently represent Power Bus Way. It’s probably not a far reach to foresee Legrand migrating representation to its EWS agents, where it makes sense

According to the press release:

“ Legrand®, a global specialist in electrical and digital building infrastructures, announced it acquired Power Bus Way, a Toronto-based provider of custom-designed cable bus solutions for data centers, industrial facilities and commercial projects. Due to increasing demand for more digital infrastructure, Legrand estimates the North American data center market will continue to grow. This accelerated growth is further bolstered by increasing power needs, particularly in relation to the rapid adoption of Artificial Intelligence (AI) technologies. The addition of Power Bus Way enables Legrand to more fully serve this large, quickly expanding market, in addition to industrial facilities, large-scale commercial projects and more, by offering two robust and complementary cable bus solutions.

Legrand’s first cable bus solution was launched in early 2024 and is a highly reliable, field-adjustable option from its Cablofil® product line. Legrand extends its cable bus offering with Power Bus Way’s custom engineered end-to-end solution which caters to customized layouts and provides all lengths, equipment connections, supports, terminations and cables to suit site-specific requirements. Power Bus Way’s unique contractor-specific installation features and staging services round out the engineered package to reduce on-site labor and ambiguity. This serves the specific needs and demands of even the most complex applications.

Power Bus Way will become a business unit of Legrand’s Electrical Wiring Systems (EWS) Division. Brad Barrett will continue to lead the Power Bus Way business as Vice President and General Manager, reporting to Ravi Ramanathan, President of Legrand’s EWS Division.

“The world’s digital needs are ever evolving and expanding to support both escalating usage and more robust technologies, including AI. Ensuring reliable pathways for power is essential to the data center market,” said Brian DiBella, President and CEO, Legrand, North and Central America. “Legrand prioritizes acquiring smart, well-run companies with the goal of investing in the business to foster continued innovation and further accelerate growth. As Legrand continues to prioritize deepening relationships with data center end-users and the engineers, electrical installers and distributors serving the market, the addition of Power Bus Way allows Legrand to offer a broader set of complementary solutions, including two distinct cable bus options. This guarantees Legrand customers, not only in the data center space but also industrial, commercial and more, have access to the right system, every time, for delivering mission-critical power to projects of any size or complexity.”

“Since 2006, Power Bus Way has established itself as a leading provider of fully customized power feeder systems for the data center market as well as industrial and large-scale commercial applications. Through the exceptional quality of our solutions and service, we have built a reputation for customer satisfaction and project success,” said Barrett. “Legrand’s robust sales organization and financial strength will help Power Bus Way broaden our field representation and customer base, while also giving current customers access to a diversified product offering to fit a wider range of project needs. Additionally, through shared expertise and ongoing collaboration, the product teams will be well positioned to meet the evolving needs of the industry.”

Given the growth of the data center, and the continued outlook, this is a nice deal for Legrand with significant opportunity.

Odyssey Sells NSI

Last month, Odyssey Group announced that it sold NSI Industries to Sentinel Capital Partners.

And it was right on time.

Odyssey acquired NSI in March 2020. So, after 4 ½ years and nine (9) acquisitions, it was time to sell based upon the “historical” PE playbook.

According to the press release:

“Since Odyssey’s initial investment in 2020, NSI has undergone transformational growth. The Company, in partnership with Odyssey, significantly strengthened its operations, including through investments in global sourcing, distribution excellence, manufacturing capabilities, and enhanced management talent. Furthermore, NSI deepened its relationships with core distributor customers while nearly doubling its customer base, delivering strong revenue growth throughout Odyssey’s ownership. Through eleven strategic acquisitions under Odyssey’s ownership, NSI diversified its product portfolio with key electrical brands and entered the HVAC market.

“We are proud of what we have accomplished in partnership with the NSI management team,” said Craig Staub, Senior Managing Principal at Odyssey Investment Partners. “The successful outcome of our investment reflects our experience in helping middle-market businesses navigate growth inflection points. At the time we acquired NSI, the Company was a leading supplier in its markets, but with a narrower addressable opportunity and more limited manufacturing and distribution capabilities. Over the past several years, we worked with the NSI management team to expand the Company’s product suite, end market exposure, and operational capabilities, ultimately creating a leading platform in the highly attractive electrical and HVAC markets. Moreover, NSI represents another successful investment for Odyssey in the electrical products and services sector, and the Company is well positioned to further capitalize on continued electrification tailwinds. We wish the entire NSI team continued success in their new partnership with Sentinel Capital Partners.”

“Odyssey has been an invaluable partner to NSI over the past several years, supporting our shared vision for growth and innovation,” said G.R. Schrotenboer, CEO of NSI Industries. “Their commitment and deep sector knowledge enabled us to build out a strong, skilled team, enhance our product portfolio with market-leading brands and become a best-in-class partner of scale to the distribution channel. We are excited for the next chapter as we continue our journey to deliver exceptional solutions and service for our customers.”

Throughout the summer and into the fall, strategic industry acquirers and private equity firms learned more about the company but, as they say, “Sentinel had the right price.” Reportedly the number started with a “B”

Sentinel also has experience in the electrical industry as it was the owner of Power Products (GB, Marinco, Amprobe and a few other “random” businesses” from 2013-2016. They sold the company to Genstar who then deconstructed the business into Marine and ECM. Sentinel bought back ECM in 2019, which is sold to nVent in 2023.

Part of the playbook for ECM was to outsource / transfer production … to China and Mexico. Could the same happen … maybe although sources shared that an attractive element of NSI was their service model, with feedback supported by NSI’s customers. There ability to deliver for customers, and being easy to do business with, was viewed as a competitive difference.

And given the potential of tariffs, aggressively seeking to change product sourcing may not be in anyone’s best interest in the near future.

From a disaggregation viewpoint, it would not be surprising to see Sentinel “recommend” that the HVAC business be grown and spun off or separated, grown and then sold given that, other than maybe some corporate allocations, there isn’t much synergy.

Given Sentinel’s track record, the questions become “whom do they help NSI invest in next in the electrical space” and “whom will the business be targeted to be sold to in 4-5 years?”

Harger Sells to TE

Harger, best known for grounding, was sold to TE Connectivity last month for a reported.

According to the press release,

“TE Connectivity, a world leader in connectivity and sensors, has acquired Harger, an American leader in lightning protection and grounding solutions for IEEE markets. Grounding solutions are the cornerstone of grid reliability, enhance both the safety and functionality of the entire electrical system and form a critical component of a solar farm’s electrical balance of system (EBoS). With this strategic acquisition, TE’s energy business unit serves customers with a broader portfolio for grid reliability and connectivity solutions in renewable power, utilities, and industrial applications.

“Harger is an attractive addition to the TE portfolio because of its proven market reputation and strong customer service. I am pleased to welcome the talented Harger team to TE and create our new engineering and manufacturing competence center for lightning protection and grounding solutions,” said Bart Otten, senior vice president and general manager of TE’s energy business unit. “Adding Harger to our portfolio enhances the value we bring to our customers as one connectivity partner. This acquisition is a critical milestone in our strategic vision to be partner of choice for innovating sustainable energy networks that keep the power on.”

“For 64 years, Harger has been an expert in lightning protection and grounding solutions and services, ensuring the reliability of the power grid infrastructure in North America,” said Mark Harger, steward of the company and son of the founder. “Under TE, customers will benefit from service continuity and ongoing investment in new product development. I am excited for the future of the Harger business.”

It will be interesting to see how Harger changes from an entrepreneurial company as it is absorbed by a conglomerate.

Reps

FRM continued its diversification, and expansion, into lighting with FRM Lighting and Controls acquiring Team Lighting in North Carolina.

According to their press release:

“FRM announced today that Team Lighting’s Durham and Charlotte locations will be joining the FRM Lighting & Controls team in North Carolina. Rudy Barber, Rob Taylor, David Locke, and their respective teams will be joining the FRM Lighting & Controls organization effective immediately.

The TEAM offices have been serving their markets for over 20 years, building extensive relationships with customers and manufacturers. “TEAM is an ideal complement to our FRM Lighting & Controls business. The North Carolina trading markets are each unique, and TEAM’s ownership has built market-leading agencies that play to the strengths of each territory. At FRM, our goal is to represent best-in-class manufacturers, and the TEAM Lighting line cards are perfectly aligned with that objective. We are excited to expand our Current HLI representation,” said Rob Duncan, Executive Vice President of FRM/Bell & McCoy.

FRM Lighting & Controls will be serving the North Carolina market from offices in Charlotte and Raleigh.”

Team Lighting represented Current Lighting’s HLI brands. FRM has a tight relationship with Current, so this continues the aggregation Current representation within the FRM Lighting & Controls footprint.

This continues FRM Lighting & Controls’ build out of FRM’s lighting footprint in the Southeast.

Under the FRM umbrella there is FRM Electrical, FRM Lighting & Controls and FRM Energy. With the various Bell and McCoy Companies, the combined business is one of the largest agencies within the US, however, each geographic areas has separate line cards to support manufacturers locally.

Distributors

Sources in the Charlotte market shared that Atlantic Coast Electric Supply (ACES) acquired a small distributor in Rock Hil, SC, Carolina Electric Supply Company (CESCO).

This one location branch, supported by Eaton, will become ACES’ 8^th branch location and help the company grow in the Charlotte market as Rock Hill has become a “suburb” of Charlotte.

Given that Carolina Electric has a lighting showroom, it can be inferred that the branch was more residentially focused to support contractors, builders and homeowners.

Reportedly the owner and all employees are staying. The business will be rebranded ACES later in Q1.

Why sell? The owner is aging out and had no real succession plan (way too common of a story).

Congratulations to ACES. This company is a growth story in the Carolina market.

And these 5 are on top of ones reported last week and in November.

And I expect some more to be announced before the end of the year.