Welcome to ElectricalTrends.
ElectricalTrends is a communications vehicle, offered to the electrical distribution industry, by Allen Ray Associates and Channel Marketing Group. The purpose of ElectricalTrends is to share Allen Ray Associates’ and Channel Marketing Group’s insights on industry trends, observations on industry activities and issues and ideas that may benefit industry participants in their endeavor to improve their businesses in the areas of growth and profitability.
For more information about ElectricalTrends' purpose, moderation policy and advertising policy email email@example.com
Wednesday, October 2, 2013
According to TED Magazine, his latest acquisition vehicle, AMP Electrical Distribution Services, is acquiring Leff Electric, which is based in Cleveland, OH.
It's not surprising that Mr. Worthy has acquired an electrical distributor as many have heard of his interest to return for the past 18 months. Reportedly he solicited opportunities in the Texas market as well as the Midwest. Leff is an interesting distributor to be a "platform company for future growth and expansions" for AMP as:
- Cleveland (yes, Cleveland) has the potential to be a growth market due to access to the Utica Shale (natural gas and oil) market as well as Leff can reach into western PA and other surrounding areas for the Marcellus Shale markets.
- Leff is a strong contractor-house with a good project group
- The company recently (last month) launched a new website showcasing its' Energy Solutions group (growth opportunity) as well as its National Account (lighting-oriented) group.
In emphasizing a "platform", presumably this means that they have identified acquisition targets (and may be talking to them) in contiguous markets, which is a strategy that Worthy utilized when he first started making acquisitions for Sonepar years ago.
In speaking with a manufacturer yesterday, they asked for my thoughts (and I refrained) but shared some of their thinking (which is incorporated below along with some other questions):
- "An individual who has invested into a rep firm now owns a distributor ... What is the "wall" to prevent them from using information from the lines the rep represents on behalf of the distributor?"
- Leff, according to its website carries Leviton, P&S, Hubbell, Watt Stopper and Wiremold
- And it begs the question, how will other local P&S, Watt Stopper and Wiremold distributors respond (and the reps).
- Leff has been a stalwart AD distributor however AD historically has not allowed acquired companies to remain in the group (unless acquired by an AD distributor). This is not the case with IMARK as USESI, which was started by Richard Worthy, became an IMARK member. Could we hear that effective November 1, Leff (or AMP) is an IMARK member?
- Whom is "next"?
- there may be a "wall" or an agreement that prevents sharing of the information
- he could be solely a financial investor and therefore not have access to the detailed level of information
- he will make other acquisitions (don't know if it is his money or he is being backed by a private equity firm)
- since "he" will control "spend", manufacturers will want to continue to sell products to / through distributors he owns.