Rexel May Go Public Again

Sept. 22, 2006
The largest electrical distributor in the world may once again be publicly owned. The private-equity consortium that owns Paris-based Rexel SA is contemplating an initial public offering (IPO) for

The largest electrical distributor in the world may once again be publicly owned. The private-equity consortium that owns Paris-based Rexel SA is contemplating an initial public offering (IPO) for the company on the Paris stock exchange, according to several news reports that surfaced over the past two weeks.

Several sources said the process is at an early stage. A Sept. 11 Dow Jones newswire report said and an IPO wouldn’t likely happen before 2007.

Rexel USA, Dallas, did not return phone calls at press time. However, Rexel executives reportedly told the London Times that an IPO and return to the Paris stock exchange early next year is merely one of several strategic alternatives it constantly reviews.

Rexel was acquired in 2005 by an investor group including Clayton, Dubilier & Rice; Eurazeo; and Merrill Lynch Global Private Equity. It was delisted from the Paris stock exchange in March of that year.

A decision to take the public company less than two years after it was purchased would reflect a trend among buyout firms toward “quick flips,” where a private-equity company buys a company and then sells it back to the public markets in under three years at a large profit.

Rexel Inc., the North American subsidiary of Rexel SA, posted $2.5 billion in sales in 2005. Based in Dallas, the company has 4,945 employees and 300 branches in 34 states. The company ranked as the nation’s sixth largest electrical distributor, according to Electrical Wholesaling’s 2006 Top 200 listing of electrical distributors. With its purchase earlier this year of GE Supply, Shelton, Conn., the company will most likely be near or at the top of next year’s Top 200 ranking.

In the past 20 months, Rexel has expanded its global footprint through acquisitions of electrical distribution businesses in Europe and in the United States. The company made its biggest acquisition ever recently when it bought GE Supply, GE’s electrical distribution business, for $725 million. Rexel also recently completed acquisitions with Electro-Material, the leading electrical wholesaler in Switzerland; ElettroBergamo (Italy); and Capitol Light and Supply, Hartford, Conn., one of New England’s largest independent electrical distributors.

Rexel posted net profit of $132.8 million for the first half of 2006, compared with $62 million for the same period last year. Revenues rose 15.2 percent to $5.17 billion.