Acquisitive Growth in the Wire & Cable Industry
April 30, 2014
Acquisitive growth continues to represent a strategic investment alternative throughout the supply chain for wire and cable. IEWC itself has made 9 acquisitions over the past 10 years as the organization continues to pursue its vision as, "the premier global supplier of total connectivity solutions to the OEM and contract manufacturing space as well as identified market adjacencies." To that end, IEWC has made acquisitive investments with three specific purposes in mind – geographic expansion, product-line expansion and market expansion, or combinations of the three.
GEOGRAPHIC EXPANSION has been achieved through each of the 9 acquisitions. Some of these acquisitions occurred in the United States and helped to strengthen IEWC's overnight delivery service to virtually every point of consumption in the country. On the East Coast, Colonial Wire and Cable was acquired in the greater Boston area in 2006. On the West Coast Control Master Products (San Francisco) was acquired in 2008, Almo (Philadelphia) was acquired in 2013 and in the Pacific Northwest, Westlake Electronics (Seattle) was acquired in 2014.
Outside the US Division there have been several acquisitions made in various countries that include Canada, Mexico, The United Kingdom and Germany. In 2007, Wyrotech (Montreal) was acquired and in 2012 Delco (Toronto, Calgary, Tampa) was added to the portfolio. Within the CALA Division, a company in Mexico by the name of Damsa (Queretaro) was acquired in 2011. Lastly, within the EMEA Division two additional business activities were acquired including Peter Augsten (Frankfurt) in 2008 and C3 Limited (Bristol) in 2009.
PRODUCT LINE EXPANSION has helped IEWC to access the finished products necessary to offer a full basket of solutions to specific end-use markets. Such has been the case with cable ties, heat shrink tubing, sleeving, identification labels, lugs, connectors and braiding materials. In all cases, IEWC's acquisitions have served to strengthen the company's product-line offering through a deeper alignment with both upstream manufacturers and downstream customers.
MARKET EXPANSION has been achieved through a number of these acquisitions including Aerospace & Defense (Colonial), Wire Management Products (Damsa), Broadcast & Communications (Delco & Westlake) and Marine (Almo). These investments have accelerated IEWC's market entry into some new adjacencies that serve to broaden IEWC's ability to service a much broader group of OEM's and contract manufacturers.
INDUSTRY M&A DEVELOPMENTS are in a large part what makes the landscape so dynamic these days. IEWC's business partners both upstream and downstream are making similar acquisitive investments for many of the same reasons. Most recently Southwire, a large privately held wire and cable manufacturer acquired Coleman Cable, a large publicly traded manufacturer of wire and cable. Similarly, Prysmian recently acquired Draka and Nexans acquired Amercable.
On the opposite end of the supply chain Joy Global, a large publicly traded manufacturer of principally sub-surface mining equipment acquired P&H Mining, a large publicly traded manufacturer of above ground mining equipment. Similarly, Eaton Corporation, a large publicly traded power management company recently acquired Cooper Industries, a global electrical products manufacturer.
FUTURE GROWTH DEVELOPMENTS within the wire and cable industry will continue to be dominated by merger and acquisition activities. At any given point in time it is safe to assume that competitors along every link of the supply chain are actively engaged in the pursuit of acquisitive growth targets. But companies cannot and should not rely solely on mergers and acquisitions as their strategic pathway towards long-run sustainability. An organic growth strategy that focuses on the various elements of their unique value proposition should account for a large share of future top-line and bottom-line growth. These organic growth-based initiatives can come about through service offerings, product offerings and green field start-up initiatives. In these three respects IEWC is listening closely to its channel partners and positioning itself with proprietary solution offerings that both suppliers and customers alike find favor.