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WESCO Closes Trydor Buyout

by Zacks Equity Research

July 09, 2012 | Comments : 0 Recommended this article: (0)

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WESCO International, Inc. ( WCC - Analyst Report ) recently completed its acquisition of British Columbia-based Trydor Industries Ltd. for an undisclosed amount. The deal was announced last month.

Trydor Industries distributes high-voltage electrical products and services for transmission, substation and other network needs of utilities, independent power producers and utility contractors in Canada. It has offices in Surrey, Calgary and Edmonton, with year-to-date sales of approximately $35 million.

Wesco posted earnings of $3.96 per share in 2011. The acquisition is expected to add 5 cents per share to WESCO’s profit in the first year of operation.

Additionally, the acquisition will widen 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.

In October 2011, WESCO had acquired Brews Supply, Ltd. a distributor of industrial, utility and commercial products with the same intention of strengthening its industrial and utility market position in Canada.

WESCO is quite active on the merger and acquisition front. Including Trydor, the company 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’s industrial customer base and enhanced its electronic-based product offerings. The company’s acquisition pipeline remains quite robust with opportunities to expand further.

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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