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$60 Million HVAC/R Distributor Adds 18 Locations in Sunbelt Markets
MIAMI, Fla., May 11, 2021 (GLOBE NEWSWIRE) -- Watsco, Inc. (NYSE:WSO) announced today that it has completed the acquisition of Acme Refrigeration, a leading distributor of air conditioning, heating and refrigeration products based in Baton Rouge, Louisiana.
Founded in 1945, Acme offers approximately 7,000 SKUs to over 4,000 active customers throughout 18 locations in Louisiana and Mississippi and is led by third and fourth generation members of its founding family. Acme generated revenues of $60 million in 2020. Terms of the acquisition were not disclosed.
Albert H. Nahmad, Watsco's Chairman and CEO, commented: "We welcome Acme Refrigeration, its leaders and employees to the Watsco family of companies. Acme has long been an admired company within its markets with a loyal customer following. Consistent with our buy-and-build acquisition strategy, Acme will operate under its existing name and under the direction of its current leadership team to provide continuity to customers, employees and OEM partners. We look forward to providing the resources, capital and technology needed to assist in achieving their growth plans."
Watsco has acquired 64 businesses since 1989, most of which were successful, multi-generation, family-owned businesses. The acquisition of Acme is the second purchase this year. On April 12, 2021, Watsco announced the purchase of Temperature Equipment Corporation, a $291 million distributor company with 32 locations covering the U.S. Midwest. Watsco’s “buy and build” strategy can be summarized as follows:
Identify and partner with great businesses focused on the HVAC/R industry
Support their leadership team and honor the culture and legacy they have created
Ask for aggressive growth plans and help leadership achieve their ambitions
Motivate teams and reaffirm an ownership culture with long-term equity
Deploy the industry’s most comprehensive suite of customer-focused technologies
Solicit and collaborate on big ideas to foster a spirit of innovation and growth
Build a stronger Watsco because of our association with these companies
Watsco is actively seeking additional opportunities to invest and grow through acquisitions given our relative low market share of the estimated $40 billion North American distribution marketplace for HVAC/R products.
Watsco is the largest distribution network for heating, air conditioning and refrigeration (HVAC/R) products with locations in the United States, Canada, Mexico and Puerto Rico, and on an export basis to Latin America and the Caribbean. Watsco estimates that over 300,000 contractors and technicians visit or call one of its 651 locations each year to get information, obtain technical support and buy products. The Company believes there is long-term opportunity to be a significant participant and contributor in efforts to address climate change. HVAC/R products provide comfort to homes and businesses regardless of the outdoor climate. Older systems often operate below current government-mandated energy efficiency and environmental standards, resulting in higher energy use and costs to homeowners. Sales of higher-efficiency replacement systems have long been a fundamental opportunity in Watsco’s marketplace. Watsco plans to actively collaborate with its OEM partners and key stakeholders to lead these ongoing efforts in its marketplace. Additional information about Watsco may be found at www.watsco.com.
This document includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, our expected financial and operational results and the related assumptions underlying our expected results. These forward-looking statements are distinguished by use of words such as “will,” “would,” “anticipate,” “expect,” “believe,” “designed,” “plan,” or “intend,” the negative of these terms, and similar references to future periods. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in economic, business, competitive market, new housing starts and completions, capital spending in commercial construction, consumer spending and debt levels, regulatory and other factors, including, without limitation, the effects of supplier concentration, competitive conditions within Watsco’s industry, the seasonality of product sales, the ability of the Company to expand its business, insurance coverage risks and final GAAP adjustments. Detailed information about these factors and additional important factors can be found in the documents that Watsco files with the Securities and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements speak only as of the date the statements were made. Watsco assumes no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except as required by applicable law.
Barry S. Logan
Executive Vice President