Watsco to acquire 60 per cent of WWG Totaline
April 20, 2012
Watsco, Inc. has announced that it has executed a definitive agreement to acquire WWG Totaline-Carrier’s HVAC distribution network in Canada. The business will operate as a joint venture under the name Carrier Enterprise Canada with Watsco owning 60 per cent and UTC Climate, Controls & Security 40 per cent. The companies operate similar joint ventures in the U.S., Latin America and the Caribbean. The transaction is expected to close by the end of April 2012. WWG operates 35 locations and had revenues of approximately $330 million in 2011, serving 5000 customers in all of the provinces and territories of Canada. The joint venture will operate as a stand-alone business using its existing infrastructure under the leadership of its present management team. Following the transaction, Watsco’s annual revenue run-rate will approximate $3.4 billion.
Albert Nahmad, Watsco’s chairman and chief executive officer, commented: “This represents a great opportunity to expand our network into a large market in the Americas. All of the important fundamentals of energy-efficiency, conservation and environmental-sensitivity are present and relevant in Canada and its economic affluence provides us the confidence to invest and grow in this market. As a whole, the Americas have proven to be far more stable and resilient than other parts of the world and we see considerable long-term opportunity to further develop our market position.”
“Carrier Enterprise’s performance has exceeded our expectations with sales growth outpacing the industry,” said Geraud Darnis, president & CEO, UTC Climate, Controls & Security. “This new joint venture in Canada will build on the success of the Carrier Enterprise business model to further grow share and profitability.”
Nahmad added: “This is a very successful business with a strong historical presence and a great leadership team. They will have access to all of Watsco’s resources to add products, locations and capital to aggressively grow market share and expand the business. We also believe they will respond well to our entrepreneurial style and spirit.”
In 2009, Watsco and Carrier formed Carrier Enterprise as a joint venture. This joint venture increased Watsco’s market position in the U.S. and added new products, new markets, new brands, and significantly expanded Watsco’s presence in the U.S. Sunbelt. In 2011, distribution operations were added in the Northeast U.S. and Mexico. The Canadian operations will further expand Watsco’s industry leadership position and will bring our annualized revenues to approximately $3.4 billion operating from 577 locations throughout the Americas.
Nahmad added: “Approximately 16 per cent of our total revenues will now be attributable to our presence in the Americas’ non-U.S. markets, which is presently the fastest growing part of our business. This consists of locations in Mexico and Puerto Rico and exports to various Latin America countries and the Caribbean. We believe similar long-term opportunities exist in Canada to build and grow.”