Yusen & A.A. McPherson Merge, Where Does ABB Go?

Consolidation, which continues to roll through distribution with a number of deals in June, extended through to the rep / agent market.

• SESCO continued its march across the south, expanding its reach into the Texas market via ERT Lighting and NEXGEN Lighting Solutions, with acquisitions in May
• Yusen Associates announced a merger with A.A. McPherson.

While on its face the Yusen news is not “national” news, but, as they say, “that’s not the whole story.”

Yusen / A.A. McPherson Announcement

Joe LiPuma, president of Yusen, and Joe Gately, president of A.A. McPherson, shared a press release saying,

“Yusen Associates and A.A. MacPherson are excited to announce their strategic merger, bringing together two trusted leaders in the electrical industry. This partnership marks a significant milestone in both companies’ histories and reflects a shared commitment to growth, innovation, and superior service.

The newly combined entity—Yusen-MacPherson Group— will harness the strengths of each organization to better serve our manufacturers and distributor partners throughout the New England and Upstate NY Markets, building off over 183 years of combined service in the territory. Together, the companies bring deep market knowledge, complementary product lines, and a unified team of seasoned sales and technical professionals.

Key Benefits of the Merger:

• Broader Product Offering: Our new line card creates a comprehensive portfolio of best-in-class electrical solutions and manufacturers, positioning the company as a comprehensive provider of goods and services for the C&I and Utility channels.
• Operational Synergy: The alignment of resources, talent, and infrastructure will strengthen our operations and enhance service levels across all business functions. The new merged company will continue to use the A.A. MacPherson Co. Inc. brand name selling to the Utility market across the Northeast.
• Shared Vision: Both companies are built on a culture of integrity, partnership, and performance—principles that will remain central to the new organization’s mission moving forward.

“This merger is about more than growth—it’s about elevating the way we serve our partners and secures a broader vertical offering for both companies.” said Joe LiPuma, President of Yusen Associates. “By joining forces with A.A. MacPherson, we’re combining two respected legacies to shape the future of representation in New England and Upstate NY within the C/I and Utility markets.”

“We’re proud of what A.A. MacPherson has built over the years,” added Joe Gately, Principal at AA MacPherson. “This next chapter with Yusen opens exciting opportunities for our customers, employees, and manufacturers alike.”

The integration process is already underway, with a focus on maintaining continuity and strengthening relationships. We will be communicating updates as we progress. For more information about the merger, please contact: Joe LiPuma or Joe Gately.”

The letter was signed by the two as co-Presidents.

On the supply side of the business there was an overlap that is necessitating one line, at least so far, Service Wire, to seek alternative representation.

The significant aspect of the merger is that the combined entity now includes the utility business.

The “new” Yusen is representative of the Rep of the Future model that is emerging:

• Diversified. The company has separate divisions for supply (which does include “supply-oriented” lighting), lighting (Illuminate), A/V (Strateres), and now utility. This supports its suppliers and through demand generation initiatives to reach influencers (architects, engineers, and others), it influences business.
• Training. It has a dedicated Director of Training and invests to improve associate skill sets.
• Marketing. There are a couple of people in marketing and the agency is known to be creative in getting its, and its manufacturer partners, messages out into the market.
• Technology. The company is investing in technology to support its business
• Planning. In business for almost 100 years, the company has a strong team, plans regularly, and is known to do effective planning with its manufacturers. It also uses planning tools and market research to guide internal goal setting and development of services.

Line Challenges

With the acquisition, there were some line conflicts. Many involved felt the issues could be addressed, however, that was not to be the case.

Late last week it was reported that Yusen decided to resign the ABB Installation Products (T&B) line. According to a few, the decision was unexpected.

Upon hearing the news from multiple sources and being surprised as ABB has co-existed with some line conflicts over the years, I contacted Joe who confirmed that he had resigned the line earlier in the morning.

He affirmed that ABB had been aware of the pending merger with AA McPherson and that there was initially a sense that things could be worked out, but … things change.

The breadth of ABB Installation Products makes it difficult for most, if not all, reps to have some line that conflicts with one of the ABB offerings. Unlike lighting agents, who may carry competitive lines but are able to manage a portfolio based upon application and achieving the manufacturers’ goals, on the “supply” side manufacturers prefer to be the only line within their category that an independent manufacturer representative carries.

But, with manufacturers doing their own acquisitions as well as expanding their product offerings organically, this becomes more difficult. Different allowances are made. ABB had, for the most part, been tolerant in areas that it felt were not overly core to its goals. Typically, this was in smaller volume product categories, some construction product offerings, or when, strategically, they preferred to retain the rep.

While Yusen felt that the overlap was manageable, some in ABB disagreed.

At the same time during these types of negotiations, the rep needs to consider their goals, their lines, and evaluate their business more strategically. Which is what Yusen did and, according to Joe, concluded that they were not willing to accede to ABB’s requests prima face based upon the lines that they would need to give up. Further, they considered the agency, the cost of doing business, the Return on Invested Time (ROIT, which is an element of the Rep of the Future) and decided to part ways.

At the end of the day, it looks like Yusen / AA McPherson decided that it wanted to manage its line card and its future rather than to be managed.

So, the two are parting ways.

When asked if this affected the merger given that ABB Utility is a line that AA McPherson represented, Joe said it would not affect the merger.

What’s Next for Yusen and ABB?

From a Yusen viewpoint, life goes on.

From an ABB Installation viewpoint, they are determining their next steps.

Scenarios

• For those who know the New England representation market, all of the comparable sized representatives would have conflicts if they took on ABB, so that means more line conflicts. Doubtful that ABB would pursue that, unless they thought they could unseat lines.
• Could another manufacturer representative take on ABB, give up its “conflicts” and perhaps some of those lines go to Yusen? Essentially play the game of “musical chairs.”
• Could ABB “recruit,” or support, a new rep firm that wants to become established in the market? Possibly. Could it be a New York rep who expands their territory and hires new outside salespeople and supports the business from New York? The same from elsewhere?
• While many may instinctively turn their eyes to Texas, there are questions about this potential alternative.
• Could ABB decide to go direct with their own salespeople? Possible, but it would take time, significant resources, and ongoing support from distributors in the area who would need to be supported differently in the interim.

And I am confident that other options will be explored. Bottom line … the market will wait for the next shoe to drop.

Congratulations to Yusen and McPherson on the merger.