The 2020 Mid-Year Economic Update_long

WESCO: Bid for IDG Was a `Full and Fair Valuation’

In WESCO's recent conference call on its first-quarter earnings, CFO Stephen Van Oss addressed the distributor's ultimately withdrawn bid for Industrial Distribution Group in April:


(IDG) strategically fit our business well and they have done a good job on those types of programs with smaller customers, where WESCO's programs tend to be with much larger engagements. … Additionally, they had a number of specialty businesses, some of which lined up nicely with WESCO's strength, such as the manufactured housing area, where we could leverage our infrastructure nicely and bring in some new products sets to get better penetration."

Van Oss said that WESCO felt it had a "full and fair valuation"with its $11.75 bid ($0.05 less than Platinum Equity's bid) and the ...

In WESCO’s recent conference call on its first-quarter earnings, CFO Stephen Van Oss addressed the distributor’s ultimately withdrawn bid for Industrial Distribution Group in April:

(IDG) strategically fit our business well and they have done a good job on those types of programs with smaller customers, where WESCO’s programs tend to be with much larger engagements. … Additionally, they had a number of specialty businesses, some of which lined up nicely with WESCO’s strength, such as the manufactured housing area, where we could leverage our infrastructure nicely and bring in some new products sets to get better penetration.”

Van Oss said that WESCO felt it had a “full and fair valuation”with its $11.75 bid ($0.05 less than Platinum Equity’s bid) and the distributor did not want to “chase the price up.”Luther King Capital Management ultimately won the bidding war with an offer of $12.10 a share.

“We had already moved through the due diligence process to a level we thought was full and fair,”Van Oss said.

Van Oss also commented on WESCO’s plans in the acquisition arena:

“I think we have a good program and I hope that the IDG scenario proves we are a disciplined acquirer. And we are not going to force something in just to get top-line growth or to meet some type of perceived outside target.”

About the Author
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

By subscribing, you are agreeing to MDM’s Privacy Policy.

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.