The Rexel Group (Rexel; www.rexel.com), a global distributor of communications and electrical supplies, and GE Consumer & Industrial, a unit of General Electric, recently announced the signing of an agreement for Rexel to acquire GE Supply (www.gesupply.com), GE’s communications and electrical distribution business, for a total consideration of $725 million.
Upon closing, GE Supply will operate as a standalone organization and will report to the newly created Rexel U.S. Holding Group, currently led by Dick Waterman, Rexel Inc.’s executive vice president and CEO. Senior vice president and CEO of GE Supply Jeff Schaper, along with his leadership team, will continue to operate the business.
According to a press release, with $2.2 billion in pro forma 2005 annual revenues for the transferred business to Rexel, GE Supply is the main distributor of electrical products produced by GE, as well as more than 200 other manufacturers. Headquartered in Shelton, CT, the business employs about 2,500 people in more than 150 locations. GE Supply’s core communications and electrical distribution activities are mainly in the U.S.
After the acquisition of GE Supply, Rexel says it will operate in the U.S. through a “dual-banner strategy,” serving an expanded customer base “with a much larger product offering and reinforced network density.” Further, Rexel says it expects to benefit from GE Supply’s large project management experience and national footprint to attract key accounts with a differentiated service offering. Rexel will also gain expertise in GE Supply’s outsourced offering through the GE Supply Logistics and GE Production Services divisions.
“Together with Eurazeo and Merrill Lynch Global Private Equity, we strongly support Rexel and its management team as they continue to build significant value through their acquisition strategy in the attractive and highly fragmented global electrical distribution market,” says Roberto Quarta, a Rexel board member, as well as a representative of the company’s shareholders and a partner of Clayton, Dubilier & Rice, Inc.
“Rexel is committed to fostering GE Supply’s continued growth by providing support that will help the business expand its presence, products, and services-it’s a great fit,” says James Campbell, president and CEO of GE Consumer & Industrial. “The terms of this sale also ensure that GE Supply will remain a strategic distribution channel for GE products. This is a big win for us and for the customers that count on GE Supply to take care of all of their GE product needs.”