A-D unveils integrated supply initiative:

Affiliated Distributors Inc. (A-D), King of Prussia, Pa., will offer members and their customers a new Web-based capability for integrated supply and national account contracts. The plan includes the creation of a new company that will acquire all of the buying/marketing group's integrated supply and national accounts operations.

The new Web-based company, supplyFORCE.com, is in the final stages of acquiring the operations of A-D's national accounts program and the operations of A-D Northeast (ADNE), a distributor-owned regional provider of integrated supply services. The combined operations will give supplyFORCE.com a sales volume of $400 million from the moment it debuts, and will also give it a proven system for handling integrated supply. With those resources as a backbone, the company plans to build an online portal for electronic business serving the contractor and industrial markets.

If the site comes together as A-D Chairman and CEO Bill Weisberg envisions, supplyFORCE.com will be a focal point for electronic business through which regional and local distributors can take part in large national accounts, while offering the benefits of electronic commerce to their local customers without the investment in technology needed to make such a system work.

The site is scheduled for launch in the first quarter of 2000. Its first phase will include an electronic catalog of commercial, industrial and construction supplies, including the three core industries of A-D's distributor groups--electrical, industrial pipe, valves and fittings (PVF) and industrial mill supplies-plus other product categories not handled by those three groups, Weisberg said. The site eventually will make over 2 million products and value-added services more easily available to customers, according to the plan.

GroupMac and Building One to merge:

GroupMAC, Houston, Texas, and Building One, Minnetonka, Minn., have agreed to merge, forming the largest player in the competitive arena of facilities-management services. The proposed merger has been unanimously approved by the boards of directors of both companies.

The new company, with an estimated $3.2 billion in sales, 27,000 employees, and over 250 locations, would have five operating groups-mechanical, electrical, industrial, residential and janitorial services. Revenues from the electrical business in the proposed merger would be $1.2 billion and would rank the company as one of the three largest electrical contractors based in the U.S.

Bill Love, who headed Building One's electrical and mechanical businesses, will manage the electrical operations of the new company after the merger is completed. Love was formerly president of SKCE, Inc., Lenexa, Kan., an electrical contracting firm that Building One acquired several years ago. Rick Millinor, who was CEO of GroupMAC, will serve as chairman of the merged companies. He said GroupMAC and Building One will benefit from the interest in upgrading existing commercial and industrial facilities with the latest in energy-efficient electrical and HVAC equipment and high-speed voice/data networks.

Hagemeyer to buy Tristate Electrical:

Hagemeyer NV, an international marketing and distribution firm based in Naarde, Netherlands, has purchased Tristate Electrical & Electronics Co. Inc., Hagerstown, Md.

Hagemeyer will use Tristate as a platform for future growth in the U.S., according to Ivo Manders, Hagemeyer's company secretary.

Like the other major international distribution players from Europe and Canada-Rexel, Sonepar and Westburne-Hagemeyer sees acquisitions as the fastest way to build a presence in the U.S. market. The company plans to grow its U.S. electrical distribution business to $2 billion to $3 billion in U.S. electrical sales in the next few years, said Mel Meineke, manager of marketing for Tristate.

Who is Hagemeyer?

Market focus: While Hagemeyer is not a well-known entity in the U.S. electrical wholesaling industry, the company owns several European distributors, including Newey & Eyre, one of the largest electrical distributors in GreatBritain. Other electrical operations are in Scandinavia, Germany, Holland, Austria and the Baltic states. The company is also a distributor and marketer of automotive, safety and electronics supplies and consumer electronics.

Number of employees: 22,000 employees worldwide.

Locations: 60 countries in Europe, North America and the Asia-Pacific region.

Sales: $7.6 billion in 1998.

Other recent acquisition and divestiture activity: Hagemeyer recently acquired Vallen Corp., a 162-location safety-products distributor based in Houston. Earlier this year, Hagemeyer sold its U.S.-based specialty foods business.

Grainger.com launches online auctions:

W.W. Grainger, Inc., Lincolnshire, Ill., now offers online auctions on its Web site, www.grainger.com. Grainger Auction gives customers an opportunity to place real-time bids on surplus MRO products from a variety of categories, including janitorial, metalworking and hand tools. Grainger Auction is an early player in the online business-to-business auction market, which is expected to reach $52.6 billion by 2002, according to Forrester Research. Currently, Grainger lists approximately $5 million in auction inventory. Along with daily specials, customers on Grainger Auction can bid on discontinued products and other items no longer carried in the Grainger catalog. In the future, Grainger suppliers will list additional merchandise on the auction site, including products that fall outside the traditional Grainger offering.

"Using Grainger Auction, we are giving customers the opportunity to name their price for discontinued GE Lighting merchandise. It's a strategic business move that will strengthen our relationships with customers and solidify our long-term partnership with Grainger," said Billy Gandy, eCommerce Leader, GE Lighting, North America.