Understand the Value of an Electrical Distributorship

Electrical equipment wholesalers operate in a highly fragmented industry, consisting largely of family-owned business with a few locations within a relatively close proximity. The industry also has a handful of large multinational distributors and regional chains. As is typical to this type of mixed competitor environment, many of the larger wholesalers have been buying the “mom and pop” distributors to enter into new markets and increase their purchase volume leverage. This article is intended to provide insight into the situational (when and why) and analytical (how) aspects of valuing electrical distributors. A lack of knowledge regarding the value of your business could be very costly. Missed opportunities to sell the business at full value or even the implementation of an estate plan with an inaccurate or incomplete understanding of value could be costly.