WESCO International, Inc.
) recently announced its deal to acquire Hazmasters, Inc. through
its wholly owned Canadian subsidiary, for an undisclosed amount.
The deal is expected to close by the end of March.
Headquartered in Ontario, Hazmasters distributes safety
products in the industrial, construction, commercial, institution
and government markets. The company generates annual sales of
approximately $80 million from 14 branches across Canada.
The Hazmasters acquisition will enhance WESCO's safety
business and customer base, in turn, strengthening its Canadian
footprint. WESCO has been operating in the Canadian market for
more than nine decades with employee strength of about 1,100. In
2013, the company generated approximately 25% of the revenues
from Canada with annual sales of $1.88 billion ($1.08 million in
2012 or up 73.6% year over year).
The acquisition is also expected to be accretive to WESCO's
earnings. It will likely add 5 cents per share to the company's
profit in the first year of operation.
WESCO is quite active on the merger and acquisition front.
Last year, WESCO acquired RS Electronics and LaPrairie, which
expanded the company's industrial OEM (original equipment
manufacturer) customer base and enhanced its electronic-based
product offerings. In Jul 2013, WESCO acquired British
Columbia-based Trydor Industries (Canada) Ltd. - a distributor of
high-voltage electrical, industrial and utility products - to
strengthen its industrial and utility market position in
The company's acquisition pipeline remains quite robust with
opportunities to further expand and strengthen its portfolio.
WESCO is one of the largest suppliers and distributors of
electrical construction products in the United States. The
company's fourth-quarter adjusted earnings and revenues were up a
respective 18.9% and 14.3% year over year. The improvement was
aided by acquisitions and increase in organic sales, partially
offset by unfavorable currency movements.
Currently, WESCO has a Zacks Rank #4 (Sell). Other
better-rankled stocks that are performing well at current levels
Six Flags Entertainment Corporation
). All these stocks carry a Zacks Rank #2 (Buy).
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