Some big pieces are in play in distribution M&A again, including European distributors with extensive North American operations. French-based electrical distributor Sonepar’s unsolicited bid for Dutch-based Hagemeyer looks like the first low-ball shot across the bow in what likely will be a longer process of negotiating the price. Beyond price, the question may be whether the cultures of the French and Dutch-based companies can mesh.
With Hagemeyer teetering at the edge of a financial cliff just a few years back, its positioning looks better today. As our lead article in MDM this week notes, the big attraction for Sonepar is Hagemeyer’s strong North American industrial business. Sonepar’s U.S. customer base is 64 percent electrical contractors and only 14 percent industrial. Hagemeyer’s North American operations are 85 industrial and 15 percent contractor. Hagemeyer has a much more diversified product offering that includes electrical, MRO industrial, power transmission and safety products. Sonepar would get a strong integrated supply business that came out of CamBar prior to its acquisition by Hagemeyer.
Side note: A conversation today with Jon Skelly of PCE Investment Bankers highlights some of the interesting subplots of the past week’s announcements. Jon was formerly director of strategic business development for HD Supply and with Hughes Supply prior to that. He notes that the CED/USESI deal and Sonepar’s pursuit of Hagemeyer, could keep those companies occupied for quite a while. That might give Rexel some breathing room as the “acquirer of choice” in North American electrical distribution as the primary consolidator with the bandwidth and capacity to do deals.
