Two well-known independent distributor buying groups are set to merge in what figures to be a landmark combination for the electrical supply industry.

AD and IMARK Electrical co-announced June 4 that the two groups plan to merge, following unanimous approval from the board of directors of both firms.

The transaction is still subject to IMARK shareholder approval, among other conditions, and is expected to close later in 2024.

The deal does not include IMARK Canada, IMARK Plumbing or IMARK Group, each are separate entities from IMARK Electrical.

A joint news release noted that the deal follows “many months of confidential discussions and extensive due diligence.”

Framed as a “merger of equals,” AD and IMARK Electrical note that the two member-owned groups represent a combined 725 independently-owned electrical distributors in the U.S.

“We believe this merger will significantly strengthen AD and IMARK’s electrical members and partners in the United States,” said Paul Kennedy, CEO of DSG (rebranded from Dakota Supply  Group in March) and a member of AD’s board. “It will bring together the best in both organizations’ programs and services, and provide a valuable and effective hedge against consolidation.”

The resulting entity will be a division of AD called The Independent Electrical Supply Division, U.S. (IESD), and it will become part of AD’s overall community of more than 1,400 independent distributors that span nine construction and industrial supply verticals and 14 divisions across North America.

“In addition to creating an even stronger future for independent electrical distributors, this merger will eliminate significant redundancies for our supplier partners currently working with two separate groups, and will create exciting new opportunities for growth, efficiencies, and best practice sharing,” John Thompson, IMARK Electrical Board Chairman and CEO of First Electric Supply, said.

The news release detailed that a committee comprised of members from both boards worked to provide strategic direction and thought leadership throughout the dealmaking process. AD and IMARK Electrical gave special thanks to Thompson; Kennedy; Crescent Electric Supply President and CEO Scott Teerlinck; Summit Electric Supply VP of Marketing and Supplier Relations Sheila Hernandez; McNaughton-McKay Executive Chairman Don Slominski; Kirby Risk President and CEO John Eggleton; and former Border States Chairman and CEO David White for “the countless hours committed to this important work.”

“The vision, focus and collaboration of our Boards, the Special Committee, and the support they received from both our staffs has been outstanding,” AD Chairman and CEO Bill Weisberg said. “Bob Smith and Marisol Fernandez, particularly. They’re all-stars. Combining our teams and our members within a united group paves the way for multi-generational success for independents.”

“The future is bright for independents in the electrical industry,” added George Vorwick, former IMARK Chairman and CEO of United Electric Supply. “Many of us are already friends so we are excited about working together and formally leveraging the power of best practice exchange and new ideas.”

Wayne, PA-based AD was founded in 1981 by Weisberg’s father, David. The group completed its ownership transition from Weisberg to its distributor members in 2018. Totay, AD has over 850 member-owners overall that span over 5,000 branches and represent combined annual sales of more than $75 billion, according to AD’s website.

Deal Context

In the hours after the merger announcement, MDM reached out to several industry experts for their take on the impact of the AD and IMARK Electrical combination.

David Gordon — President of Channel Marketing Group, Publisher of Electrical Trends — told us:

“This easily will be 2024’s story of the year in the electrical industry. IMARK’s roots go back almost 60 years ago when the first electrical cooperative buying group was formed in the south (SIED). I’m sure none of the founders of SIED, MAED or WIED, which are the foundation of today’s IMARK, nor David Weisberg, who founded AD, envisioned the coming together of independent distributors. For distributors, it can bring opportunities of which some will enjoy better financial returns and more marketing resources. There inevitably will be some group operational synergies which should benefit members or be reinvested back into the business. Manufacturers may even get one less meeting to attend and may have some other benefits. With 725 independent electrical distributors, AD could evolve into the voice of the independent electrical channel. The combined entity represents some unique opportunities.”

Gordon is a key validation source for the electrical portion of MDM’s annual Top Distributors feature.

Dorn Group’s John Gunderson — MDM’s former VP of Analytics — told us:

“For electrical this is a meteor in the pond that gives the combined entities not only much stronger negotiating power with respective suppliers, but also strengthens the pricing competitiveness against nationals. I have no doubt AD and IMARK have had those difficult conversations with supplier partners already, and I’m guessing some national competitors just scheduled some emergency meetings for tomorrow.”

Gunderson likewise serves as a validator for MDM’s Industrial, MRO and Electrical Top Distributors Lists.

Other mergers into AD in recent years include:

• The Edge Group — Electrical, 2024
• The Baron Group — 2023, PVF
• Torbsa — 2022, resulted in the formation of AD Canada – Building Supplies
• Delta Distributors — 2021, PVF
• Safety Network — 2021, Safety
• The Drake Group — 2019, Building Materials
• IDI — 2019, resulted in the formation of AD Canada – Industrial & Safety
• IDC-USA — 2019, Bearings & Power Transmission

Bowie, Maryland-based IMARK Group was founded in 1996. Its total membership spans approximately 2,300 independent distributors and over 500 manufacturer members that represent a combined $28 billion in annual revenue, according to the group’s website.