Rexel Acquires GCG for $1.4B, Expanding US Infrastructure Reach

Rexel is significantly expanding its footprint in the United States' critical infrastructure distribution sector through a definitive agreement to acquire GCG from Audax Private Equity for approximately $1.4 billion. This strategic move is set to bolster Rexel's capabilities in high-growth areas such as electrical infrastructure, data centers, and digital connectivity, integrating a business projected to surpass $1.1 billion in annual revenue.

GCG, headquartered in Chicago, operates a robust network of 16 facilities and employs around 950 professionals. The company has carved a niche in distributing specialized wire and cable, connectivity hardware, electrical power apparatus, and engineered solutions vital for complex infrastructure projects. A key differentiator for GCG is its business model, which integrates specialty product distribution with value-added engineering and technical services. Over 75% of its revenue is derived from these enhanced offerings, including custom assembly, product modification, kitting, testing, and rapid fulfillment, positioning Rexel to engage earlier in project design and specification.

The acquisition aligns perfectly with Rexel's strategic vision, particularly its 'Axelerate 28' plan, which prioritizes expansion in core markets and a shift towards higher-value products and services. GCG's strong performance, marked by double-digit annual revenue growth since 2019, and its focus on lucrative segments like data centers, power infrastructure, grid modernization, and defense, make it an attractive addition. These sectors are experiencing heightened investment driven by increasing electricity demand, the proliferation of AI infrastructure, and the evolving technical demands of modern electrical systems.

Financially, the transaction represents a compelling valuation, with GCG acquired at less than eight times its estimated 2026 EBITDA, factoring in anticipated synergies. Rexel anticipates this acquisition will immediately enhance its adjusted earnings per share in the first year post-completion. The company plans to fund the acquisition through a combination of existing cash reserves and approximately €800 million in new debt. To maintain financial flexibility and preserve its credit rating, Rexel also intends to raise up to €500 million in equity via an accelerated bookbuilding process, subject to market conditions. Management is targeting a net financial debt-to-EBITDA ratio of around 2.0 times by 2027.

This integration is expected to yield substantial operational and commercial synergies. Rexel anticipates benefits from increased purchasing power, optimized logistics, potential insourcing opportunities, and general operational efficiencies. Furthermore, Rexel sees significant potential in introducing GCG's specialized distribution and engineered solutions to its existing customer base, creating cross-selling opportunities and enhancing its overall value proposition in the North American market. The company remains committed to its dividend policy, targeting at least a 40% payout, while continuing its pursuit of strategic acquisitions.

The deal, which has received unanimous approval from Rexel's board of directors, is anticipated to conclude before the end of 2026, pending regulatory approvals and standard closing conditions. This move solidifies Rexel's position as a major player in the U.S. specialty infrastructure distribution market, offering a more comprehensive suite of products and services to customers navigating the complexities of modern infrastructure development.