A subsidiary of WESCO International, Pittsburgh, entered into a definitive agreement to acquire EECOL Electric Corp., Calgary, Alberta, and various affiliated companies for approximately CA$1.14 billion (about $1.17 billion). The move not only adds a large chain of locations throughout Canada run by a highly regarded full-line electrical distributor, but also opens doors for WESCO in South America.
EECOL Electric began as Electrical Equipment in 1919 and grew to become one of Canada’s premier full-line distributors of electrical equipment, products and services with approximately $900 million in annual sales, 57 locations across Canada and 20 in South America, and more than 20,000 customers.
EECOL’s South American operations date back to the establishment of a joint venture in Chile in 1996. The company now has operations in Argentina, Peru and Ecuador as well. Outside of its deal with EECOL, WESCO has South American operations in Brazil built primarily through its 2010 acquisition of TVC Communications by WESCO’s Data Communications division. It serves the Caribbean and Latin American data and telecom markets from its base in Miami, a stocking facility in Mexico City, Mexico, and sales offices in Bogota, Colombia, and Sao Paulo, Brazil.
WESCO has a well-established footprint in the Canadian market, bolstered by recent acquisitions of high-voltage specialist Trydor Industries in Surrey, B.C., in June 2012; and full-line distributor Brews Supply, Calgary, in Oct. 2011.
According to a WESCO press statement, EECOL has a strong warehouse-based business focused on serving industrial, oil, gas, mining, utility, commercial and residential construction customers.
“EECOL is a strong company with a long and successful track record of delivering above-market sales growth and profitability,” said John Engel, WESCO’s chairman, president and CEO, in a press release announcing the deal. “We have a high regard for EECOL’s sales culture and excellent customer service capabilities, as well as their supplier partnerships, which complement WESCO very well. The addition of EECOL expands WESCO’s presence in Canada and broadens our international footprint, specifically our capabilities in South America.”
Pending approval under the Canadian Competition Act, the acquisition is expected to close in the fourth quarter and will be financed with a new institutional term loan to be entered into on or before closing, as well as WESCO’s existing credit facilities.
“We are very pleased to have reached this agreement with WESCO,” said Tom Crist, EECOL Electric’s president and CEO. “We have known the WESCO management team and organization for years and are confident it will be a great home for our business and our team. Through this acquisition, we can leverage our strong supplier partnerships, customer relationships, and brand equity and are looking forward to teaming with our new colleagues.”