Wesco Canada — The New Path Forward
August 18, 2020
By John Kerr
Last week Wesco held its first call detailing its results post merger with Anixter. This meeting followed Wesco’s agreement with Competition Bureau Canada to divest its legacy utility businesses (Trydor, Brews and Laprairie), along with its datacom business with annual revenues approaching CDN$200 million, according to the release of August 6.
Canadian Electrical Wholesaler estimates the merged group after divestitures will reach just under CDN$2 billion, making it the largest electrical distributor in Canada ahead of Sonepar and Rexel, CED and Graybar. Wesco had made waves before in Canada with its acquisition of Eecol in 2012.
It will be interesting to see where the datacom and utility businesses end up and who will acquire them, and even more interesting if these businesses where possible revert to their original brands. Wesco had recently merged Trydor, Brews and Laprairie under the Wesco utility banner.
The presentation showed some “great colour” to the numbers, as one analyst put it, and showed the results of a merged Wesco and Anixter post June 22. Positive cash flows, operating profits and earnings per share were highlighted.
From a Canadian perspective the results tables showed a decrease of 21% in the second quarter, a direct result of COVID-19. This was in line with much of the industry overall and mirrored results reported by Rexel for Canada several weeks ago. On an annualized basis the next effect of a negative quarter such as this would impact by about 5% or more.
What was consistent too from a Canadian view is that Wesco reported the negative effects of their construction segment while countering them with a positive gain upwards of 17% in backlog that showed the effect of project delays. This is consistent with the experience of many electrical distributors and is being confirmed by the positive results in later June, July and August to date across the country.
Another Canadian link is that Nelson Squires, who previously headed up Wesco Canada, has been named Executive Vice President & General Manager of Electrical & Electronic Solutions. Wesco will move forward with two additional strategic business units under the banners of Communications & Security Solutions and Utility & Broadband Solutions.
John Kerr is Publisher of Canadian Electrical Wholesaler.