Southwire Acquires United Copper, Leveraging Uptick in Construction Industry
Others involved in construction-driven transactions include: United Subcontractors, PowderCoat Services, Apollo Global and Hardwoods Distribution
Southwire Co. LLC is purchasing United Copper Industries Inc., a maker of electrical wire, from KPS Capital Partners for an undisclosed amount.
UCI manufactures copper wire and cable used for transmitting electricity in the construction of buildings throughout the U.S. and Canada. The company sells products through electrical distributors. UCI’s facility in Denton, Texas, consists of a manufacturing plant, a copper rod mill and sales, distribution and support operations.
Southwire, also a cable provider to electrical wholesalers and retail customers, says the UCI acquisition enhances the company’s core offerings. Headquartered in Carrollton, Georgia, Southwire says it will integrate UCI’s 300 employees and the Texas facility into existing operations.
KPS created UCI in 2011 to buy the U.S. business of Mexico-based wire provider IUSA Group. KPS brought in a new management team to modernize UCI’s equipment. “We acquired an undermanaged and underutilized satellite U.S. production facility that operated as a highly transactional market participant,” KPS managing partner David Shapiro says. The company has now grown into a “consistent profitable” North American wire manufacturer, selling products through national, regional and local electrical distributors.
KPS, based in New York City, boasts $5.6 billion in assets under management and targets “orphan” businesses of larger corporations that it says would benefit from new ownership.
The construction industry has seen an uptick in M&A activity due to increased sales in the housing market. According to the U.S. Census Bureau, new sales of single family homes rose 12.4 percent to 654,000 in July from the previous month. Recent construction-related deals include United Subcontractors Inc.’s purchasing Southern Foam and Coating; Meridian General Capital’s buying PowderCoat Services Inc.; Apollo Global Management LLC (NYSE: APO) purchasing two crane companies; and Hardwoods Distribution Inc.’s (TSX: HWD) acquiring Rugby Architectural Building Products.
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