American Wire Group, Classic Wire Acquired

The price of copper and aluminum, over the years, continues to rise and most feel that it is sustainable given the central role that, especially copper, plays in the economy. Everything from electricity transmission to data center, from EVs and autonomous vehicles to residential and commercial construction, from building industrial facilities and a core component in transformers and motors to quantum computing. The lifeblood of commerce – electricity – runs on wires.

Demand is strong, and the future is bright (demand and price) due to scarcity (and the cost of opening mines.)

And, at the same time, we know that private equity firms have capital that they are always looking to put money to work.

Earlier this week we learned that the two have come together.

While companies like Prysmian (Encore), Southwire, Alan Wire, and Cerro are the significant copper players with electrical distributors there are a cadre of “niche” companies.

One is American Wire Group (AWG) which has a more “specialty” offering but, from a distributor viewpoint, is typically invisible as they sell direct. They are focused on the utility, data center, infrastructure, and renewable energy markets. All growth sectors.

The company was acquired by Greenbelt Capital Partners according to a notice from Raymond James an advisory firm.

The note positioned American Wire Group as “American Wire Group is a market-leading distributor of wire, cable and electrical hardware components in the U.S. The Company primarily serves the renewable energy and utility sectors, while also distributing electrical products for commercial, industrial, residential and data center applications. AWG maintains one of the nation’s largest inventories of wire and cable solutions in strategically located distributed centers, making them a trusted partner for complex infrastructure projects”

And part of AWG is a company well-known to electrical distributors, Classic Wire. Many may remember George Merritt, who recently retired from Classic.

Both companies were founded, and have been led, by 40+ year veteran Bob Dorfman.

A note to the Classic manufacturer reps stated:

“American Wire Group, LLC and Greenbelt Capital Management L.P. are pleased to announce Greenbelt’s investment to support AWG’s continued growth across the electrification landscape. The partnership will aim to reinforce AWG’s leadership in the energy market and position the Company to further expand its portfolio of solutions across evolving industry demands.

As a subsidiary of American Wire Group, this transaction also includes Classic Wire & Cable, LLC.  All key members of AWG and CWC’s management teams will remain in their roles, continuing to oversee the Company’s day-to-day operations.

This is very exciting news for our company and something that we have worked towards for a long time, we’ve grown tremendously in the last 9+ years, and this will add rocket fuel to what we are already doing”

As the price (and cost from a material input viewpoint) and utilization of copper and aluminum wire increase, having a larger capital partner helps. More importantly, there are opportunities to grow the business both at the end-user level (direct for AWG) as well as via distribution. And, with a 40+ year veteran founding both companies, the entrepreneur story of “needing an exit” is inevitable faced.

Congratulations to the AWG and Classic teams and here’s looking forward to seeing both companies take the business to the next level.