Insights into the forces shaping our industry.
Who’s Next – Power Distribution
Our industry has yet to see a slowdown in regards to mergers and acquisitions. But will COVID-19 affect current and future M&As? Companies are adjusting and proceeding using online meeting technology to fill the in-person void. We expect M&A deals will continue and be approached the same way with virtual meetings. We are treating this situation similarly to the last recession.
Between 2007 – 2008, Sonepar, Viking Electric, CED, REXEL, USESI, among a few other distributors didn’t let their acquisition business falter. During the 2008 recession, companies managed to complete acquisition deals; and we trust organizations today will carry on despite the COVID-19 pandemic.
Among power distribution, electrical distribution, wire/cable and lighting; our records show that there were well over 60 M&As in 2019. Legrand, Emerson and Siemens acquired manufacturers across three of the verticals, with Acuity Brands taking over in lighting. Companies strategizing to increase market share, expand markets served, etc.
Here’s a review of M&As over the last few years (primarily focused on 2017 – now).
With only a few acquisitions in 2019, Emerson has acquired many more companies in the previous years. Between 2017 – 18, Emerson bought a few handfuls of companies. Emerson expanded into oil and gas with the purchase of Paradigm and Geofields in 2017.
In 2017, Power Distribution saw quite a few international buys. To name a few…Siemens acquired Infolytica, Canada-based; GM bought LM Wind Power of Denmark; Schneider Electric purchased India-based Luminous Power Technologies and ABB acquired B&R (Bernecker + Rainer Industrie-Elektronik GmbH) of Austria. As mentioned in lighting, Legrand serves multiple electrical industry verticals. Legrand expanded its data center power and controls solutions with the acquisition of Server Technology in 2017. Some domestic buys…Hubbell expanded its solutions to utilities with the acquisition of Aclara Technologies.
2018 had more notable buys. Among Emerson’s acquisitions, Hitachi sealed an $11 billion deal with the purchase of ABB Power Grid Business and ABB acquired GE Industrial Solutions for $2.6 billion. Siemens alone expanded its building automation and IoT solutions with the purchase of Building Robotics and J2 Innovations, plus their expansion of power controls systems and switchgear offerings with the acquisition of Russelectric.
There were a few acquisitions in 2019 but not as striking as 2018. Eaton widened its switchgear offerings with the acquisition of Innovative Switchgear Solutions (ISG). Emerson broadened their SCADA solutions by purchasing Zedi.
CLICK HERE to read about more M&As in distribution, lighting and wire & cable
So far in 2020…
There has been some M&A movement the first quarter of 2020. Power distribution, electrical distribution and lighting has already seen some noteworthy purchases. Earlier this month, Cooper Lighting became a business unit of Signify and Legrand’s unexpected acquisition of Chicago lighting manufacturer Focal Point. Ecosense just expanded its LED lines with the purchase of Soraa, a California-based LED designer and manufacturer.
ABB, Eaton, Danfoss A/S and IES Holdings have started off their years strong with at least one acquisition. ABB solidified its purchase of Cyclone Controls in early March. Eaton purchased Power Distribution Inc. Expanding its data center power distribution and monitoring solution; and in turn, Eaton sold its Hydraulics Business to Danish industrial company, Danfoss A/S.
Wire and cable’s saw a change in PE firm ownership with Odyssey Investment Partners’ acquisition of NSi from Blue Sea Capital.
The Anixter war heated up in January until Wesco’s big and final bid was accepted. Winsupply already has two acquisitions under its belt with the purchases of Morgan Brothers and Rosen Supply to expand in the plumbing and heating market.
If the past few years and the recession are any indication, electrical distributors will continue to acquire in the next three quarters. M&A deals may slow down in quarter two as we all work out the kinks of our current situation with the Novel Coronavirus; but we expect business to continue as usual.