3 More Distributor Acquisitions, and One Manufacturer

The distributor acquisition train continues to roll along with three more deals announced this week plus a manufacturer sale (although the manufacturer was linked to a distributor.) These become distributor acquisition #27, 28 and 29 since July (and next week I’ll try an end of year recap of all the deals reported by ElectricalTrends.)

The acquisitions were:

27. FSG, also known as Facility Solutions Group, a large electrical distributor that offers a wide range of lighting solutions to end-users and contractors, and an IMARK member, acquired $11 million West-Lite Supply, an $11 million lighting distributor based in Cerritos, California with additional locations (field personnel? In San Francisco, Cincinnati and Lexington, KY. West-Lite served the local LA market and national accounts.

Growth through acquisition is relatively rare for FSG but this deal helps them expand their presence in the southern California market.

28. Dickman Supply, based in Sidney, Ohio, acquired Lyons Electrical Supply and Lighting Showroom, a fellow IMARK distributor. Lyons, based in Dayton, becomes Dickman’s fifth location. Lyons is a 75 year old company that at its zenith had three locations and 50 employees. Lyons’ revenues were somewhere between $4-8 million. The company, an Eaton distributor, served the DIY and small contractor (resi and small construction) markets. Dickman is run by Jason Geise, a second generation owner.

The acquisition expands Dickman’s footprint to serve its, and new, commercial contractors. Dickman plans to retain the Lyons name, probably due to the retail business and brand value and is already investing into the business to expand the warehouse, indicating they have significant growth plans for the market. Dickman also owns a customer wiring solutions business called Electro Controls.

29. LED Supply, a lighting distributor based in the Denver are (Lakewood), and an IMARK distributor, was sold to Applied UV. As part of the purchase, and perhaps the primary reason for the purchase, LED’s sister company, PURO Lighting, was sold to Applied UV, a publicly listed disinfection technology company that primarily serves the healthcare and hospitality industries. The company focuses on the “development and acquisition of technology that addresses infection prevention in the healthcare, hospitality, commercial and residential industries.”

Combined, LED Supply and PURO Lighting had revenues of about $18 million with a “combined transaction value of approximately $20 million”. The acquisition value is probably driven by the value in PURO Lighting as a lighting distributor would not sell on a 1:1 basis.

The acquisition doubles the size of Applied UV, which has grown through small acquisitions. The combined LED Supply and PURO Lighting deal is the company’s largest, and it appears that Applied UV would have initially been interested in PURO, since the company focuses on manufacturing, and that either LED Supply sought to be sold at the same time or Applied UV found benefits in owning a distributorship as for logistics support and another, perhaps more predictable, revenue stream. Applied UV shows that small companies can be publicly held companies.

The market continues to move along and we know we’ll hit at least 30 deals since July by the end of the year.

One observation. Many of these divestitures are of “smaller” distributors of which, presumably, there were no successors in the business. It is good to see that these small company owners were able to find an exit plan to monetize their business rather than having to run the business down (sales wise) or eventually sell off the inventory and lock the door and “walk away.” And to see new acquirers in local markets.