ORLANDO, August 18, 2005 (PRNewswire-FirstCall) — Hughes Supply, Inc. announced that it has entered into a purchase agreement to acquire TVESCO, Inc., a Tennessee Valley-based distributor of electric utility and electrical products. Hughes anticipates that the closing will occur on or about August 29, 2005, subject to customary closing conditions.
TVESCO, Inc. distributes transmission and distribution (T&D) and electrical commercial and industrial (C&I) products to municipal utility, electric cooperative utility and contractor customers through 14 branches in five southeastern states. TVESCO had annual sales of approximately $138 million for the 12 months ended December 31, 2004, and employs 170 full- time associates. Assuming an August 29, 2005 closing, the acquisition is expected to be slightly accretive to fiscal year 2006 earnings, and add approximately $0.03 to fiscal year 2007 diluted earnings per share.
Tom Morgan, President and CEO of Hughes Supply, commented, “We believe serving the electric utilities industry is an excellent business with very good long-term growth prospects as utility companies, in efforts to increase efficiency and productivity, are increasingly outsourcing their inventory management and procurement services to distributors. In addition, we expect a higher level of maintenance spending by utility companies with the recent passage of the Energy Bill by Congress that will require electric utilities to meet federal reliability standards for the electricity grid. The maintenance- related nature of the Utilities business, along with its use of multi-year alliance contracts with utility providers, makes it less vulnerable to construction cycles, allowing for a more predictable cash flow. Additionally, its efficient use of capital results in a higher return on invested capital than Hughes Supply’s overall return.
“The acquisition of TVESCO further strengthens the geographic footprint of our Utilities and Electrical businesses by expanding into the Tennessee Valley region. Its stable base of municipal utility, rural electric cooperative utility and electrical contractor customers nicely complements our existing customer base, and its reputation for customer service excellence is well- aligned with Hughes.
“Within our portfolio of businesses, Utilities is one of the higher- growth, higher-return businesses, and with this proposed acquisition, we build our Utilities market leadership position to over $900 million in expected fiscal year 2007 sales. This acquisition allows us to continue to execute our acquisition strategy of investing in market leaders that improve overall profitability, reduce cyclicality, and that expand our geographic footprint. We look forward to having them join the Hughes Supply family,” concluded Morgan.
About Hughes Supply, Inc.
Hughes Supply, Inc., founded in 1928, is one of the nation’s largest diversified wholesale distributors of construction, repair and maintenance- related products, with over 500 locations in 40 states. Headquartered in Orlando, Florida, Hughes employs approximately 9,400 associates and generated annual revenues of $4.4 billion in its last fiscal year. Hughes is a Fortune 500 company and was named the #1 Most Admired Company in America in the Wholesalers: Diversified Industry segment by FORTUNE Magazine. For additional information on Hughes Supply, you may visit http://www.hughessupply.com/ .