On the acquisition front that is.
Growth can come from multiple ways, even in tough times. While a number of distributors are developing / implementing targeted strategies and some are opening new locations, others are taking advantage of competitor challenges.
Given a challenging economy (in many markets) rising operational costs, tighter credit, cash flow issue, reduced importance to suppliers, potential generational issues and the need to generate higher profits to reinvest into the business, a number of smaller distributors are looking for an exit strategy. This leads to acquisition opportunities for those with clean balance sheets, strong cash flow, progressive management teams and exemplary bank relations.
To date there have been 13-15 acquisitions that we have been able to document. Six of these have been done by Sonepar.
We’ve also heard of lots more “chatter” throughout the country, with the most talk in the New England area (4-5 deals), Pacific Northwest and the Southwest. Many of these are “fill-in” opportunities (rather than opening a branch and having to find personnel). Essentially Sonepar appears to be the only company looking at larger deals (which could be an opportunity for larger independents.)
Deals have included: Beacon (Gexpro/Rexel), Owen Electric (CED), Project Lighting (CED), Mountain Vista (Sonepar), ESSCO (Sonepar), Hagemeyer/Rexel (Sonepar), Equity Utility (Sonepar), Robson (Sonepar), Anchor (Sonepar, Dec ’07), Monti (WESCO, Dec ’07), Atlantic Lighting & Supply (Servidyne). If you know of others, email us the companies involved and we’ll add it to the list.
So what does it take? A corporate strategy based upon growth, confidence in your management team and a well-run company. History has shown that companies that aggressively grow in down markets and that take market share thrive in “bad” times and have accelerated growth when the economy rebounds.
This begs the question, “Could an acquisition benefit your growth plan?”
If you are on the opposite side and are evaluating your next steps, do you know how to best position your company to maximize your selling price while benefiting your employees?
What are you seeing on the acquisition front?
2 Comments
Let’s see how bad GE wants to get rid of their own name.
Appliances and light bulbs are high on their list to dump.
They turned all these products into commodities. Openly do not want to work with distributors.
At least IBM kept their name.
Sign of the times?
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