Dutch equipment seller purchases Hagerstown electronics distributor

Buyer wants acquisition of Tristate Electrical to expand growth in U.S.

Acquisition

November 13, 1999|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

A Dutch equipment wholesaler has bought Hagerstown-based Tristate Electrical & Electronics Supply Co. Inc. for an undisclosed amount.

The buyer, Hagemeyer N.V., announced the acquisition yesterday.

Tristate, with 525 employees and 34 branches in Maryland, Delaware, Virginia, West Virginia and Pennsylvania, is the leading electrical distributor in the mid-Atlantic, with annual sales of $192 million. The company supplies materials such as cables, switch gears, lamps and lighting products, and delivers technical support and services to contractors, industry and government institutions.

Hagemeyer, which is pursuing a strategy of focusing on business-to-business sales and service in professional products and information technology, hopes to use the acquisition as a stepping stone for further U.S. growth.

Because Tristate is a strong regional company in a fragmented market, it will allow Hagemeyer to build a distribution network throughout the nation, the Dutch company said.

"We will be the management team that will launch their effort here in North America," said Mel Meineke, marketing vice president for Tristate. "We will manage a geographic proximity yet to be defined" as Hagemeyer grows through further acquisitions.

Hagemeyer's board said it would retain Tristate's management team, including President Grayson Oldfather, who serves on the board of the National Association of Electrical Distributors.

"We anticipate no changes," Meineke said. "No name change. Management will stay the same. Hagemeyer's mode of operation is very autonomous and decentralized."

Officials of the Netherlands-based company were not available for comment yesterday.

In its announcement, Hagemeyer said the internally financed sale should contribute positively to results in 2000. In August, the publicly held company reported that its after-tax profit before extraordinary charges increased by 3 percent to $90.7 million for the six months that ended June 30 on $3 billion in sales. After the charges, the company posted a net loss of $94.1 million for that period.

Hagemeyer expects to leverage the expertise of its existing electrical distribution group, which is the market leader in northwestern Europe.

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