Rexel to Acquire HVAC Distributor Wasco

Jul 31, 2023

Rexel officials said the deal would help put it at the forefront of the energy transition.

PARIS — Rexel has announced its acquisition of Wasco, one of the leading distributors of HVAC products and services in the Netherlands, further building its European presence to seize fast-growing electrification opportunities.

Founded in 1970 and owned by Gilde Equity Management, Wasco operates 35 branches and two distribution centers in the Netherlands, and generated turnover of about €540 million over the 12 months through the end of April, including 60% through digital channels. With this acquisition, Rexel will double in size in the Netherlands, making it the group's fourth-biggest country.

Over more than 50 years, Wasco has built a strong presence on the Dutch HVAC market, which is in the forefront of Europe's energy transition, driven by national regulations. The conversion from gas boilers to electrical heat pumps has allowed Wasco to post double-digit growth over the past few years and will further support sustainable demand. This acceleration in the energy transition also leads to increasing proximity between the HVAC and electricity markets in the Netherlands, both at the installer and the distributor level, enabling more cross-selling opportunities.

The Wasco acquisition will allow Rexel to benefit from energy-transition related opportunities. Those markets — HVAC in the case of Wasco but also photovoltaic solutions, industrial automation or EV charging solutions — whose growth is substantially above Rexel's in other markets, should also bring resiliency as they are driven by corporate agendas to reduce their emissions, as well as government incentive plans. Rexel has already developed a successful HVAC business, concentrated in countries where heating is traditionally electric, such as France.

With an enterprise value of €485 million, the implied multiple stands at 9.2 times Wasco's EBITDA or less than 7 times after full realization of the expected synergies, notably including cross-selling opportunities and logistics optimization. The transaction is expected to be accretive in year one to Rexel's adjusted EBITA margin and EPS as well as value creating in year two, fully in line with the Group's criteria. The transaction will leave Rexel's indebtedness ratio significantly below 2 times EBITDAaL on a proforma basis. It is in line with the capital allocation strategy outlined at the 2022 Capital Markets Day and fully compatible with the ongoing share buyback program.

The acquisition remains subject to customary conditions including completion of the consultation process of Wasco's works council and approval by the competition authority, i.e. the European Commission. It is expected to close in the second half of 2023.

Guillaume Texier, CEO of Rexel, stated, "With the acquisition of Wasco, we are totally in line with our strategy aiming at seizing electrification and energy transition opportunities. It's also fully consistent with our purpose, ‘Electrifying solutions that make a sustainable future possible.'"

"The Netherlands is one of the most exciting European markets from an electrification perspective, benefitting from a fast-paced transition from gas, driven by incentives and regulations, notably the ban on gas boilers both in new build and renovation. Wasco is ideally positioned to be an active player in this transition; it is also best-in-class in terms of digitalization. We are excited to start working with the Wasco teams to unleash the great opportunities that the association of both companies in the Netherlands will create. This transaction demonstrates that Rexel continues to carefully select the best development opportunities, accelerating its growth related to electrification in Europe and reinforcing its positioning in the U.S., through both organic initiatives and small-to mid-size value-creating acquisitions."