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Thursday, February 23, 2012

2013 Movers & Shakers

Each year Electrical Wholesaling publishes its thoughts on the prior year's movers and shakers. Sometimes these are people, sometimes companies, sometimes industry issues.  While we don't have a crystal ball and we're less than 60 days into the new year, but there are some early contenders (electrical distributors, electrical manufacturers, personnel) sure to be in next year's article ... and topics that are generating conversation.  They include, in order of occurrence:
  • IMARK Expands ... First with Crescent Electric, next with Power & Telephone Supply.
IMARK surprised many with bringing in the 27 state Crescent Electric which, according to phone calls we've received, surprised many members, thinking Crescent was viewed more as a national chain. In the words of a couple of manufacturers "this redefines the definition of independent. Wonder if Graybar or CED is next?" (note: Only WESCO, Rexel, EIS (owned by Genuine Parts) and Grainger are publicly owned companies)
Recently IMARK added Power & Telephone Supply, a "leader in the procurement, sales, material management and distribution of product solutions to the worldwide telecommunications marketplace" based in Memphis, TN.  From looking at their website, aside from cable, there appear to be limited focus on the core electrical industry.  Again, people asked "why" and our response is "don't know and presume IMARK will inform it's membership of its direction" (some of the calls have come from manufacturers.

  • ABB Grows
ABB's acquisition of Thomas & Betts has generated much conversation albeit little informed insight. Aside from the fact that ABB wants to grow its industrial business, this is an interesting move and will be closely watched.  We understand that Rockwell and others have solicited distributor input regarding moves they should consider. The beginning of more industry consolidation? Will "parts manufacturers" become more aligned with gear / control manufacturers? Industry veterans may remember when it was discussed that Cooper could become part of Rockwell or Eaton and when GE Industrial Systems was up for sale.
We'd expect to see more from ABB as an article stated they had $18B for acquisitions through 2016.  They spent $4.5B for Baldor, $3.9B for Thomas & Betts ... who's next after they digest T&B?
  • The Year of Acquisition
While Sonepar made a number of acquisitions last year we're hearing a number of a number of distributors putting out feelers. It seems that there is a confluence of generational issues, a flat market, eroding margins and the fact that the capital gains tax is expected to increase 12/31/12 are conspiring to accelerate distribution consolidation.
On the manufacturer side we're hearing that European companies are eyeing the US market due to the US being one of the few developed countries that is expected to have some growth and that European companies are seeking to convert euros into another currency.
Typically the EW list highlights a top 10.  3 spots may be gone in less than 60 days.  What are your thoughts on these market movers?  Conversation fodder for the NAED SouthCentral?
With no insight, perhaps given the convergence of datacom and electrical they are looking for acquisitions? Perhaps another way to improve profitability in some manufacturers / product categories? Perhaps IMARK wanted them for the sake of volume to further off-set its nominal operating expenses? Perhaps IMARK is planning on starting a telecom / datacom supply group and Power & Telephone is the catalyst to recruit new suppliers?  Other rational ideas? (DG)

IMARK definitely has the size, question is, will members and manufacturers benefit? And can a group of IMARK's size address the needs of its members or is management responsible to only a small group of board members (who all have full-time jobs). Perhaps at the upcoming Showcase IMARK members will hear the rationale and the vision?
For these moves, Bob Smith (IMARK) and Marty Burbridge (Crescent) get nominated for the 2013 list.

9 comments:

  1. Heard ex-industry T&B commercial leader, Bob Calhoun went to work for Imark in "Member Relations." Good move by Imark...demonstrates they are sensitive to their members' concerns over possible dilution of membership.

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  2. Calhoun was a nice guy but he wasn't a leader as much as a schmoozer at T&B. Hasn't he been out of the industry for awhile. Why do we need the overhead or maybe we need a better golfer and winepicker.

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  3. I hope IMARK is planning on sharing its new direction with us at Showcase. I'm wondering what the purpose of Crescent and this new company is. How does this help my rebate?

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  4. ABB could become an industrial powerhouse. Good brand name. Nice pickup with Baldor. T&B has lots of quality industrial products. And they have money to spend. A company I need to better understand. Hope European owners don't screw up good companies.

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  5. I agree with Anonymous he Calhoun is a good golfer and winepicker not sure what else there is!

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  6. The announcement on the Calhoun hire described him as being hired to recruit more new members. We need more??? We just addeed 1,000 small new members and a nationla chain. This is out of contril.

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  7. as an original member, I wonder what the F is going on with the group and who is running it? Seems like we got more bozos in DC trying to spread the wealth. Need to somehow go back to some selectivity. Maybe need to look at a alternatives, perhaps a 3rd industry group?

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  8. Here's ABB's CEO saying that they plan on more acquisitions in the US, although not of the size of T&B - http://www.bloomberg.com/news/2012-02-25/abb-sees-buying-opportunities-in-the-u-s-hogan-tells-le-temps.html - perhaps fill-in industrial lines to be under the T&B umbrella?

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  9. Not sure a 3rd industry group is necessary , there is an alternative though that has clarity of mission . Wonder how Imark will handel the impending break up of EW on the East Coast?

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