WESCO International, Inc. (WCC”>WCC) completed the previously announced acquisition of RS Electronics, a distributor of electronic and electrical products. Terms of the deal were not disclosed.
Michigan-based RS Electronics Inc. is a leading North American distributor of electrical products, serving primarily the industrial, medical equipment, automotive and contract manufacturing end markets. The company has eight branches located in the Midwest and Southeast with projected sales of approximately $60 million for 2011.
The RS Electronics acquisition will expand WESCO’s industrial OEM customer base and enhance its electronic-based product offerings. Since both companies have complementary products, WESCO’s product line would be considerably broader after the acquisition. Management has stated that the addition of RS Electronics would be 4 cents accretive to its earnings in the first year of operation.
WESCO is quite active on the M&A front. It acquired Carlton Bates Company in 2005 and AA Electric in 2008. These acquisitions greatly helped WESCO to expand its portfolio, enhance the product line and expand top-line growth. In September 2011, WESCO acquired Brews Supply, Ltd. a distributor of industrial, utility and commercial products with branches in Calgary, Edmonton, Mississauga and Fort McMurray. The acquisition strengthened
WESCO is one of the largest suppliers and distributors of electrical construction products in the United States. The company’s third-quarter earnings and revenue were up a respective 50.0% and 19.0% year over year. The growth was aided by acquisitions and positive currency movements. WESCO competes with Anixter International Inc. (AXE”>AXE) and W.W. Grainger Inc. (GWW”>GWW).
Currently, WESCO has a Zacks #1 Rank, implying a short-term Strong Buy recommendation.
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