A-D and C.L. Watt agree to merge
Affiliated Distributors (King of Prussia, Pa), and C.L. Watt (Schaumburg, Ill.), have agreed to join forces by Jan. 1, 2001. Combined 2000 revenues in PVF and plumbing of the two organizations -- member companies are projected to exceed $6 billion.
C.L. Watt members voted unanimously to join Affiliated Distributors during a meeting Sept. 20 in Chicago. As a result of this agreement, Affiliated Distributors will establish a new and separate Plumbing Division. The A-D Plumbing Division will consist of former C.L. Watt members as well as a select group of current members of A-D's Industrial Pipe, Valves and Fittings Division who also participate in the plumbing industry. About one-third of C.L. Watt members will qualify for membership in A-D's Industrial PVF Division. The new Plumbing Division will be headquartered in King of Prussia.
"We're calling it an alliance," said Richard Reese, president of Standard Plumbing Supply (Salt Lake City) and current chairman of C.L. Watt. "We are all trying to do everything we can to improve our service levels and at the same time improve our cost position. This allows us to do both. We look forward to leveraging our strengthened market position."
The synergies between C. L. Watt and A-D are enormous, said Christopher Hartmann, A-D's president and COO, in a statement. "Both organizations have extremely strong members, a track record of performance and effective marketing programs. Combining forces will result in a strong market share position and even better opportunities for networking and the exchange of best practices for all members."
Ross Tallman Jr., president of Tallman Co. (St. Louis), said he will miss the affiliation through C.L. Watt but added: "It seems like this is a direction for the future that we needed to explore. We did a good job, but there comes a time when you have to follow a different road. We're not losing anything, but we're gaining a lot."
Columbia Pipe & Supply has been a member of both C.L. Watt and A-D. "For C.L. Watt, this makes a big statement about the preservation of independent distributors," said Tim Arenberg, president of the Chicago-based firm. "This is a way of staying an independent entity and still becoming part of something with much greater channel power. It's nice to consolidate without having to give up your company."
John Pope, CEO of F.W. Webb (Burlington, Mass.), which also has been a member of both organizations, commented, "The plumbing wholesaling industry is under siege. You either get bigger or you go away."
Expanded e-commerceThe alliance between C.L. Watt and A-D enables members of both groups to join together to create a significant force for Internet, online and e-commerce marketing, Reese said.
In related news, supplyFORCE.com has agreed to integrate the distributor members of C.L. Watt into its Participating Distributor network. SupplyFORCE.com is a provider of supply-chain and business-to-business e-commerce solutions for the procurement of electrical, industrial and construction supplies. It was launched as a separate company by A-D last year. Participating distributors can take part in e-commerce by developing private-label catalogs and routing orders from the supplyFORCE.com marketplace.
"With the addition of C.L. Watt, supplyFORCE.com will have even more industrial, plumbing and HVAC products and delivery options to offer industrial, institutional, commercial and contractor customers," said Bill Weisberg, chairman and CEO of supplyFORCE.com, in a statement.
A-D consists of 350 distributors that manage 3,900 locations in the United States, Canada and Mexico. C.L. Watt, founded in 1968, is a cooperative of 55 independent distributors of plumbing, heating, air conditioning and industrial piping products.