Rexel and US-based private investment firm LKCM Headwater Investments (“LKCM Headwater”) announced that they have signed an agreement for LKCM Headwater to acquire the Gexpro Services business from Rexel in a transaction that is expected to close in the first quarter of 2020, subject to the satisfaction of certain conditions precedent.
The transaction will provide enhanced development opportunities for Gexpro Services, which has been a non-core activity run independently from Rexel’s core Electrical Distribution Business. The Gexpro banner remains a core element of Rexel USA’s electrical distribution business. This divestment will enable Rexel to focus its resources on its core strategy, including the US electrical distribution business and digital transformation across the Rexel Group, and also accelerate its deleveraging, in line with its capital allocation policy.
Gexpro Services specializes in electrical power and control, fastening systems, machined and fabricated parts, valves, and mechanical components. Gexpro Services has branches in 11 states, including three in California, two in Georgia, two in Texas, and branches in Florida, Illinois, Missouri, Kentucky, New York, North Carolina, South Carolina, and Ohio.
Gexpro Services, which was acquired by Rexel as part of the GE Supply acquisition completed in August 2006, specializes in providing integrated customized supply chain solutions centered around C-Part products (fasteners, fabrication, mechanical and electrical) primarily to high specification OEM industries (Power and renewables, technology, transportation, aerospace, etc.). With approximately 400 employees, Gexpro Services generated sales over the last twelve months through end-September 2019 of circa $260 million, mostly in the US.
Patrick Berard, Chief Executive Officer of Rexel, declared: “Under LKCM Headwater, Gexpro Services will become core and will benefit from a new owner with extensive specialty, value added distribution experience to add investment and focus, driving continued growth and high levels of customer service. This divestment, which follows a disposal program of 650 million euros in 2017 and 2018, is in line with our strategy aiming at optimizing our portfolio with targeted divestments or acquisitions, to continue refocusing on our core business and create further value.”
LKCM Headwater Investments is a private equity firm based in Houston, Texas. Its portfolio includes 18 different companies, including Buckhorn Waste Services, which provides saltwater disposal services to trucking companies and oil and gas operators in North Dakota, Texas, and New Mexico. It also owns Relevant Solutions, which specializes in industrial controls and automation solutions for a wide variety of products, and Bearcom, a distributor of two-way radios and wireless communication products.
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