In a market shakeup for industrial MRO products and services, Vallen Distribution is set to buy Wesco Integrated Supply (WIS) — the industrial supplies unit of electrical supplies distribution giant Wesco International — for $350 million.
Announced Feb. 23, the deal includes predominantly all of Wesco’s industrial MRO integrated supply business in North America and Europe, which had 2023 total sales of approximately $784 million.
Along with its product assortment, Wesco Integrated Supply’s value proposition centers on technical product knowledge and supply chain solutions that reduce total costs and deliver documented savings. While Wesco International is headquartered in Pittsburgh, PA, WIS is based out of Uniondale, NY and leverages Wesco’s six fullfulment centers. The WIS website states that the business unit has over $1.4 billion of annual supply chain spend under management.
Meanwhile, Belmont, NC-based Vallen is a distributor of MRO products and a like provider of indirect industrial supply chain solutions, vendor managed inventory and technical services. Vallen is owned by private equity firm Nautic Partners, which acquired the company from Sonepar in mid-2022.
The sale is expected to close in 2024’s second quarter following regulatory approval.
Overall for Wesco, the move figures to position the company more purely as a distributor of electrical, electronics, communications, security, utility and broadband products and solutions.
“This divestiture supports our portfolio management strategy to prioritize investments and resources in the areas of our business that offer the strongest growth and profit potential,” Wesco Chairman, President and CEO John Engel said in a news release. “Our WIS team has consistently provided exceptional value to our customers over the years. I am very proud of their accomplishments and thank them for their outstanding customer service.”
The announcement came 10 days after Wesco reported its 2023 fourth quarter and full-year financial results, which showed that annual sales total $22.4 billion, up 4.5% vs. 2022, while 4Q sales dipped 1.5%.
For Vallen, the move enhances its market presence in industrial MRO. On MDM’s 2023 Top Distributors Lists, Vallen was No. 18 for Industrial Distributors and No. 9 for MRO. Meanwhile, it considerably adds scale to Vallen’s supply chain service capabilities.
“We are excited to bring together two outstanding supply chain solutions providers through this transaction and see significant opportunity ahead for the combined company,” Vallen CEO Chuck Delph said. “This combination further expands and complements our vision to deliver unique and customizable supply chain solutions for our customers’ indirect spend and enhances our ability to partner with the supplier community.”
Kevin Pugh, Vice President and General Manager, WIS, said, “Over the course of our 50-year history, WIS has become a key provider of integrated supply services and MRO procurement solutions,” added Kevin Pugh, WIS Vice President General Manager. “The combination with Vallen will allow us to deliver an even broader range of solutions for our customers as we continue to drive for excellence and innovation.”
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