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WESCO International, Inc. ( WCC - Analyst Report ) announced its acquisition of British Columbia-based Trydor Industries (Canada) Ltd. for an undisclosed amount. The deal is expected to be closed in July.
Trydor Industries has year-to-date sales of approximately $35 million, with offices in Surrey, Calgary and Edmonton. The company distributes high-voltage electrical products and services for transmission, substation and other network needs of utilities, independent power producers and utility contractors in Canada.
The Trydor acquisition will bolster WESCO’s presence in Canada through the expanded utility business and customer base. WESCO has been operating in the Canadian market since 1922 with about 1,100 employees. In 2011, the company generated approximately 15% of revenue in Canada with annual sales of $900.6 million ($682.4 million in 2010 or up 32% year over year). In October, WESCO had acquired Brews Supply, Ltd. a distributor of industrial, utility and commercial products with the same intention to strengthen its industrial and utility market position in Canada.
The acquisition is also expected to be accretive to WESCO’s earnings. It will likely add 5 cents per share to the company’s profit in the first year of operation. Wesco posted earnings of $3.96 per share in 2011.
WESCO is quite active on the M&A front. Including Trydor, the company has made six acquisitions in the past 21 months. The earlier five acquisitions together had annualized sales of approximately $460 million as of their respective closing dates.
The last acquisition was of RS Electronics in January, which expanded
WESCO is one of the largest suppliers and distributors of electrical construction products in the United States. The company’s first-quarter earnings and revenue were up a respective 39.0% and 12.0% year over year. The growth was aided by acquisitions and an additional workday in the quarter. WESCO competes with Anixter International Inc. ( AXE - Snapshot Report ) and W.W. Grainger Inc. ( GWW - Analyst Report ) .
Currently, WESCO has a Zacks #3 Rank, implying a short-term Strong Hold recommendation.
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