Jackson — The recent acquisition of family-owned Stuart C. Irby Company with Sonepar USA, a subsidiary of family-owned Sonepar SA Paris, brings two industry leaders together.
From an international strategic perspective, the merger is beneficial for both, believes John Lox, who heads the international business program of Mississippi State University’s College of Business and Industry.
“It strengthens both companies,” he said. “Irby is not alone in a sea of competitors and has a support base with the parent company. The relationship appears to be strong. Sonepar gains a strong foothold in the South, a fast growing region. The qualities are absolutely outstanding of both companies.”
Lox notes that the management and operating style of Sonepar is to let companies operate with autonomy. That’s good for Irby, he feels, because the Jackson-based company will continue to make itself successful.
“There isn’t much effect from an international standpoint,” Lox, who has lived and worked in Europe, said. “Globalization will continue and local companies will play in that sandbox whether or not they want it.”
For the Irby family, the acquisition completes a courtship that began two decades ago. “Sonepar is a family business, too, and they’ve been in it for many years,” said Stuart M. Irby, president of the company. “I remember when the Sonepar founder came here 20 years ago and met with my dad and me. We weren’t ready to make the change then.”
Irby lists several reasons, in no certain order, why the time is right now for the acquisition. They are as follows:
• The stockholders list of Stuart C. Irby Co. has evolved through the years and the company was looking for diversification.
• Consolidation has become more prevalent in the electrical industry and the business world is more complex.
• The Irby Company can grow at a faster pace with the infusion of outside capital.
• The market for companies in the industry is better than it’s been in some time.
Considering the opportunity
“There was a lot of money out there looking to invest in companies like ours and the bidding climate was good,” Irby said. “We couldn’t pass up this opportunity.”
On a personal level, he says he saw what it would take to go to the next level with the almost 80-year-old electrical distributor and opted not to be the one to do that. “I’ll retain an advisory role with the company,” he said. “I’ll play it by ear as to what my role will be.”
Chief operating officer Michael C. Wigton will lead the Irby Company now. He’s worked all over the country and seen the company from different sides, even as a competitor. “The Stuart C. Irby Co. has some great people and the Irbys have done a fantastic job,” he said. “This is a great move for our company. The biggest issue is that this is a family-owned business selling to a family-owned business. Sonepar is not a financial business that will sell us in a few years for a profit and it’s not a big public company.”
Although Sonepar has certain expectations for the Irby company, Wigton says the parent company does not have the philosophy of making people run things their way.
“We’re very excited about joining the Sonepar family,” he said. “We will have the resources available to us, which will enable us to expand our growth into other markets. It is consistent with our growth strategies.”
Wigton says the company will continue to operate and market itself under the Irby name. He and Stuart M. Irby stress that the company, the seventh-largest electrical distributor in the U.S., will not have fewer employees as a result of the acquisition.
“Sonepar likes what we’re doing and they don’t want us to change anything,” Irby said. “We do not expect any deterioration in the level of service, and we will share our best practices with the other companies. Sonepar has a lot of experience, and has the desire to let us do our thing going forward.”
Lox says that often an acquiring firm has a culture different from the acquired company that makes it difficult for the two to mesh. He cited the Daimler-Chrysler merger as an example of a difficult merger because the two automakers had two very different cultures. Mississippi’s Bryan Foods merger with the Sara Lee Corporation is one that has worked well, he feels.
“Most companies have a policy on how they treat acquired companies and that includes management at various levels,” he said. “With a lot of private companies, it can be very healthy for both when they merge. If business doesn’t grow, it will affect both equally.”
He notes that Sonepar will be stronger with the increased access and that the Paris-based international company will act more like a holding company for the Stuart C. Irby Company.
“The acquisition should provide a win/win situation for everyone,” he said. “The customers get better quality and service — maybe lower prices, too — and they will see increased support from a larger support base.”
Lox adds that acquired companies usually want to maintain a good level of visibility in their home area and keep a lot of things the same.
Founded in 1926, the Irby Company is a $400-million electrical distributor operating out of 35 branches in the south central and north east regions of the country. Those branches are in the states of Mississippi, Tennessee, Alabama, Florida, Arkansas, Louisiana, Texas, Oklahoma and New York. Irby is one of the top 20 electrical distributors in the United States within the electrical distribution market in the segments of utility, commercial, contractor and industrial.
Contact MBJ contributing Lynn Lofton at email@example.com.