Fort Wayne-based Franklin Electric Co. Inc. (Nasdaq: FELE) has announced the acquisitions of three distributors in Montana, California and North Carolina. The deals total $89 million, with two having already closed and the third expected to close in the second quarter.
Franklin Electric will acquire professional groundwater distributors 2M Co. Inc., based in Montana, California-based Western Hydro Holding Corp., and North Carolina-based Drillers Service Inc. The company will also take over the standalone joint venture between 2M and DSI.
"Over the last several years, Franklin Electric has worked closely with the management of these three companies and the leadership of other strategic distribution partners," said Gregg Sengstack, chief executive officer of Franklin Electric. "These relationships have provided us with insight into and appreciation for the value proposition offered by water systems distribution. By acquiring Western Hydro, 2M and DSI, including the stand-alone 2M/DSI joint venture, Franklin Electric is forward integrating into this channel with four strong, customer focused organizations competing in the market, increasing our commitment to the entire channel and the installing contractor base."
The company plans to operate the acquired distributors under one banner, known as Headwater Companies LLC. DeLancey Davis, who has spent the last 11 years as an executive with Franklin Electric, will serve as president of Headwater Companies and will be responsible for integrating the three acquisitions into a single unit.
Sengstack says the new combined entity will be the largest in the industry with 60 locations and nearly 500 employees. The company expects the Headwater Distribution segment to have about $275 million in consolidated annual sales.