Distributors are selling their businesses at a pace the electrical wholesaling industry usually only sees in the most active acquisition years. And while industry analysts aren't willing to say 2011 will see a record number of distributor deals, this year is shaping up to be one of the most active acquisition years in the last decade (see chart of 2011 distributor acquisitions on page 2). Electrical Marketing has already reported on 19 distributor M&As in 2011, while in all of 2010 there were only nine distributor deals.

The electrical market tends to see a surge in acquisitions when bank capital to fuel acquisitions is readily available, business owners are optimistic about future business conditions, or when the industry's biggest acquirers want to build out their distribution networks into new regions or market niches. While the future business climate is suspect right now, there's plenty of money available for acquisitions, particularly from private-equity firms itching to invest their clients' cash. There currently aren't any national or super-regional distributors building out national distribution networks on as grand a scale as when companies like Consolidated Electrical Distributors Inc. (CED), Dallas; Sonepar USA, Philadelphia, or All-Phase Electric Supply, Benton Harbor, Mich., would purchase electrical supply houses at a dizzying rate. But as we saw recently with Sonepar's purchase of Independent Electric Supply, San Carlos, Calif., they will make a deal to expand their geographic presence into specific markets where their coverage is light.

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Thank-you from the staff of Electrical Marketing.