Franklin Electric Buys Stake in Distributors
2M, Western Hydro, Drillers Service to Operate as Headwater Companies
Franklin Electric Co. has acquired controlling interests in 2M Company Inc., Western Hydro Holding Corporation and Drillers Service Inc. The three groundwater product distributors will operate under the name Headwater Companies LLC, serving groundwater professionals across the United States.
“By forward integrating into distribution in the U.S., Franklin Electric is taking a logical next step in our evolution as a groundwater pumping systems company,” says Franklin Electric Chairman and CEO Gregg Sengstack. “This action places Franklin Electric shoulder to shoulder with the key decision makers in this end market — distributors and the installing contractors. The Headwater Companies will continue to operate as full line wholesale distributors with a focus on total water systems support, including products from all industry manufacturers. Headwater will maintain a laser focus on supporting the professional installing contractor.”
As “full line wholesale distributors,” Headwater Companies will continue to carry an array of products to equip drillers and other groundwater professionals, not just products manufactured by Franklin Electric.
“The specialized groundwater distribution channel in the U.S. through which we sell our products is an important element in the ultimate sale, support and specification to the installing contractors,” Sengstack says. “Working in partnership with our distributors, Franklin Electric has developed a broad array of products and systems solutions that will only grow as regulatory and efficiency demands increase in North America.”
The acquisition is worth approximately $89 million in total, and the new distributorship will have a wide footprint across the United States. 2M Company is based in Billings, Mont.; Western Hydro operates from Hayward, Calif.; and Drillers Service Inc. (DSI) is based in Hickory, N.C. Headwater has a combined 60 locations and nearly 500 employees, which Sengstack calls “the largest in the industry.”
The sale of the 2M and Western Hydro is complete. The DSI acquisition is expected to close by the end of June. Franklin Electric Vice President DeLancey Davis has moved to the newly created Headwater Companies to serve as president and integrate the companies, including a joint venture between 2M and DSI, into a single operating unit.
“Over the last several years, Franklin Electric has worked closely with the management of these three companies and the leadership of other strategic distribution partners,” Sengstack says. “These relationships have provided us with insight into and appreciation for the value proposition offered by water systems distribution. By acquiring Western Hydro, 2M and DSI, including the stand-alone 2M/DSI joint venture, Franklin Electric is forward integrating into this channel with four strong, customer-focused organizations competing in the market, increasing our commitment to the entire channel and the installing contractor base.”
To learn more, visit franklinwater.com.