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2017 wasn’t your typical news year. Relatively few electrical distributors were acquired, but in just three deals more than $700 million in electrical sales shifted to new owners. And while EW’s editors counted at least two dozen notable acquisitions of electrical manufacturers, many the deals focused on the lighting, ESCO or IoT markets. Here are Electrical Wholesaling’s picks for the news and trends that stood out in 2017.
Border States Electric, Crescent Electric Supply, Mayer Electric Supply and McNaughton-McKay expand into new regions with acquisitions.
The biggest deal of the year at press-time was McNaughton-McKay’s acquisition of The Reynolds Co., Fort Worth, TX, which unites the #14 and #15 distributors on EW’s 2017 Top 200 listing into one company with sales of more than $1.2 billion. Both companies are AD affiliates and Rockwell Automation distributors. The deal will give McNaughton-McKay a major foothold in the oil and gas and petrochemical markets in Texas and along the Gulf Coast.
The Border States’ acquisition of Kriz-Davis, Grand Island, NE, bolsters the company’s regional coverage through Nebraska, Iowa, Kansas, Missouri, Oklahoma and Texas. Kriz-Davis is one of the largest regional distributors of utility products in the United States, and its emphasis on serving electric utilities will blend nicely with Border States’ strong utility emphasis. Another thing that stands out in is the number of new branch locations in the Upper Midwest it picked up through this deal and its 2014 purchase of Kansas City-based Western Extralite.
Crescent Electric Supply, East Dubuque, IL, made three acquisitions that increased its coverage in Ohio, Virginia and Washington with its purchases of Mesco Electrical Supply, Milford, OH; Womack Electric Supply, Danville, VA; and H.D. Campbell Co., Kent, WA, through its Stoneway Electric Supply business. Rounding out the larger 2017 acquisitions was Mayer Electric Supply’s purchase of Top 200 distributor Upchurch Electrical Supply Co., Fayetteville, AR. At press-time, four Top 200 distributors had been acquired in 2017.
ABB’s $2.6 billion purchase of GE Industrial Solutions shakes up the electrical equipment market. GE’s intentions to move away from its traditional electrical roots were well-known. But when the deal finally went down, it still took your breath away, not only because of the enormous purchase price but also because it reflects just how big a player ABB has become in this part of the electrical market. The company is well-known globally and is a big player in the utility business, but its acquisition of Thomas & Betts in 2012; Baldor in 2010 and now GE Industrial Solutions make it a real force to reckon with in the United States and an even bigger competitor for Eaton, Schneider, Siemens and Rockwell Automation, which recently spurned a purchase offer from Emerson.
In addition to GE Industrial Solutions, ABB made two smaller purchases with its acquisitions of Austria-based Bernecker & Rainer Industrie-Electronik and the mission-critical business unit of Keymile Group, Hanover, Germany.
The other manufacturer acquisitions that caught our eye this year included Schneider’s purchase of the ASCO Power Technologies and its well-respected transfer switch business from Emerson; Atkore’s acquisitions of Calpipe Industries, Hobart, IN, and Flexicon Ltd., Birmingham, England; and Southwire’s continued expansion in its ancillary tool business with its purchase of Sumner Manufacturing, Houston.
Acquisition activity in LED lighting and ESCO/lighting services market reflects the changing boundaries of the lighting market.
GE is in the news in this segment, too, with its announced intentions to spin off its foundational lighting business, but there were plenty of other companies announcing deals, too. As mentioned earlier, of the more than two dozen M&As that Electrical Marketing reported on in 2017, ten of them either were purchases of lighting companies or involved lighting manufacturers buying ESCOs. S chneider Electric bought the Louisville, KY-based ESCO Energy & Sustainability Services, and Osram Lighting Solutions, Wilmington, MA, purchased Maneri-Agraz Enterprises, Houston, TX. Most of the other lighting deals were fairly small, but it was interesting to see mainstream electrical manufacturers like Leviton and Legrand expand their lighting holdings.
On a related note, there were signs of lighting reps broadening their portfolios, too. Two of the larger lighting reps in the United States made news with acquisitions this year, with KSA Lighting & Controls, Hanover Park, IL, buying Phillip McCully & Associates, Toluca, IL, and SESCO, Maitland, FL, bought G2 Lighting Agency, Birmingham, AL.
Smart grids and IoT continue to make waves in the electrical market. The numbers in Liberty Lake, WA-based Itron Inc.’s acquisition of Silver Spring Networks, Inc., San Jose, CA, highlighted just how fast IoT is exploding, as the transaction was valued at approximately $830 million. Both companies have been a front-runners in building out smart-grid applications.
In a smaller but still interesting deal in the connected home segment of the IoT space, Hubbell Inc. bought iDevices, Avon, CT.
The table on the next page (click the "View Full List" link) lists the various acquisitions that took place in 2017 but Electrical Wholesaling’s editors would also like to highlight two other deals in the e-commerce/software space — the sale of IndustrySmarts, Glastonbury, CT, and its ElectricSmarts business to JDM Technology Group, West Vancouver, British Columbia, and Cranberry, PA-based TrueCommerce’s purchase of Datalliance, Cincinnati. The folks from ElectricSmarts and Datalliance have long been regulars on the electrical trade show circuit and we wish them well in this new era of their companies’ growth.