SWEDEN/USA: Swedish refrigeration and air conditioning wholesaler Beijer Ref has taken its first step into the North American market after agreeing to acquire Heritage Distribution Holdings in a $1,275m deal.
Heritage Distribution is a leading HVACR distributor in the south/south east of the US. It was formed from mergers of three regional leaders: Wittichen Supply (founded in 1914), Benoist Brother Supply (founded in 1928) and Ed’s Supply (founded in 1957).
Headquartered in Atlanta, Georgia, Heritage Distribution has 64 branches in 10 states and approximately 800 employees. The company is said to have a strong track-record of high and consistent organic growth and a high share of recurring revenues derived from repair and replacement. Turnover for the twelve months to the end of September 30 was $636m.
The Heritage Distribution group also includes Tennessee-based Coastal Supply Company and NuComfort of Chicago, Illinois.
Beijer Ref has undergone massive expansion over the last 20 years creating dominant positions across Europe, Africa, Asia and Oceania. The acquisition marks the company’s entry into the North American market and will establish the company as a leading HVACR distributor in one of the most attractive regions for HVACR in North America.
The deal is seen by Beijer Ref as providing an ideal platform to drive consolidation of the North American market. It sees benefits for its CO2-based systems, global supplier agreements, private label products (both in HVAC and refrigeration), as well as providing strong capabilities in M&A. In addition, Heritage Distribution has a broad and diverse product portfolio with comprehensive brands that will complement Beijer Ref’s current product offering.
Beijer Ref CEO Christopher Norbye described the deal as “an important strategic step” for the company. “The North American market is currently undergoing a shift towards electrification and energy efficiency, accelerated by regulatory changes. Also, the growing recognition of indoor air quality and climate change impacts has increased the demand for environmentally friendly and innovative HVAC technologies, which creates a great opportunity for our combined product offering,” he said.
“Furthermore, the North American market is highly fragmented and Heritage Distribution offers an excellent platform from which we can continue to drive consolidation. With our collective industry awareness and proficiency, there are many significant and valuable synergies to be unlocked.”
The acquisition includes approximately 98% of the shares in Heritage Distribution and the remaining shareholding will continue to be held by current management.
The acquisition is conditional upon regulatory approvals and customary closing conditions and is expected to close early in Q1 2023.