by Kirsten Nelson
With Legrand North America’s acquisition of Middle Atlantic Products complete more than a month ago, the two companies are talking about what comes next. Reassuringly, the only difference customers will likely see is an expanded array of products available from Middle Atlantic, as the company’s sales force expands its catalog to include select offerings from Legrand’s various electrical and data communications brands.
Legrand, which established and built its business in the electrical and data markets with ever-expanding divisions in these areas, added home control systems to its roster in 2005 when it acquired On-Q and merged Greyfox into that brand. Legrand then added more depth to its residential lines with the acquisition of Vantage Controls in 2006, and later through the merging of UStec under the On-Q umbrella in 2007. Now with the acquisition of Middle Atlantic, Legrand has established a fourth division, focused on commercial AV.
“Middle Atlantic will be Legrand's principle organization to pursue the AV contracting market,” explained John Selldorff, president and CEO of Legrand North America. “Strategically that's how Legrand goes to market. We organize ourselves around customer sets and products and brands that meet their needs. With Middle Atlantic, we have a market leader that we can build on, and that's our plan.”
Coming from the power and data side of the commercial construction industry, Legrand observed a trend toward the synthesis of multiple services within the building, including telephony and video delivery. Noting the specialized nature of the AV integration market, the company looked to acquire rather than assimilate that intelligence.
Despite its presence in the residential market, Legrand’s intentions for Middle Atlantic are focused solely on commercial AV. “We don't have plans to integrate into their home division or consolidate sales channels,” Baker said. “Legrand's focus was on commercial AV, as it relates to us, primarily because commercial AV is an exciting space and is growing significantly. They feel very good about the position they have in the residential marketplace. They think that they serve a niche and that they're well positioned for a rebound in the market.”
The merger, from Middle Atlantic’s standpoint, allows the manufacturer “to create an AV infrastructure company like no other,” said Mike Baker, president of the company. “It's about bringing a total solution to the AV contractor customer that has supported us so well through the years. The partnership with Legrand brings us products for today's world that are beyond what we’ve even imagined yet from an AV contracting standpoint.”
Specifically, Middle Atlantic has been given the opportunity to cherry pick from Legrand’s various electrical and data product lines to bring products to market which serve the needs of AV integrators. Middle Atlantic director of marketing Mark Tracy is leading a team that is selecting these products, likely to be culled mainly from the Wiremold, Ortronics, Cablofil, and Pass & Seymour brands. Middle Atlantic reps are currently seeking input from the consulting and contracting community on which products would be most useful in the commercial AV market, and integrators should expect to see these new offerings made available by the first quarter of 2012.
Meanwhile, back in Middle Atlantic’s own dynamic R&D department, the merger means growth in burgeoning categories such as AV furniture and energy management. “From an investment standpoint, and an opportunity to grow the business, we've been very successful with our entry into the AV furniture in the form of the C5 credenza rack,” Baker noted. “We're looking to expand that, and Legrand will support us from a manufacturing standpoint.”
That support Baker indicated, may include the acquisition of AV furniture manufacturing entities. Asked to elaborate, he said, “We have a very effective, cost-efficient manufacturing, but someone may be better at that. We will always look to apply best practices because our goal is to provide premium solutions to AV contractors. If we can't be that supplier, we would look at acquisition.”
Having the support and resources to make such expansion possible is one more benefit of the Legrand acquisition, according to Middle Atlantic founder, chief engineer, and CEO Bob Schluter. “That was my vision throughout this entire process—selecting a partner. It was a careful selection for what's best for the marketplace, what's best for the employees, and wanting to continue to see it grow. The partnership with Legrand allows some incredible opportunities to continue to add value to the marketplace. People look at Middle Atlantic as a value provider, this partnership allows us to provide more value and innovate more. The people at Legrand have a terrific team, and as their people and our people integrate, we're seeing a lot of good positives happen from the standpoint of product development, technology, and solutions.”
Middle Atlantic’s reputation in the marketplace was long ago established on the notion that its product innovations are often the direct result of suggestions and ideas from AV integrators and consultants who work in the field every day. That input will definitely continue to be a source for new designs. “We've always gotten valuable field input from the engineers, specifiers, installers, systems contractors, and end users, and that's what we've filtered into our organization,” Schluter said. “There are so many things, and we have had to make hard decisions because you can't have a bigger appetite than you're capable of producing. This partnership certainly allows us to do more. From a product standpoint I'm very excited about what we can do.”
Additionally, the expertise of Legrand’s various brands will likely come into play. “There's a lot of complementary resources and good people on both sides,” Schluter observed. “As we're heading toward more and more energy management, that will be something that's very important in the partnership going forward. Legrand is currently in the energy management business, and we're jumping into it. This is another exciting thing for the industry.”
The resources certainly run deep. Before its acquisition of Middle Atlantic this summer, Legrand also purchased Electrorack, a specialty manufacturer of data racks, in January 2011. The two brands serve very different markets, and will remain separate entities. Baker explained, “Newcomers to the AV industry often ask, why are there so many different rack models? The answer is that all 19-inch racks are not the same. Different markets and applications have different requirements, and what may seem to be small differences in the rack designs actually make big differences to the installing contractors. Designing the right racks for each market and application lets us help our customers save time and be more effective, and that is not a small difference at all. The multiple brands will continue to represent our assurance that the products were designed for the job and will perform as expected.”
Maintaining the integrity of multiple brands is Legrand’s specialty, a trait it plans to keep in tact with its Middle Atlantic acquisition. “At Legrand we grow through a combination of investing in our existing businesses and acquiring good businesses and then helping them grow to realize their ambitions,” Selldorff said. “We are not newcomers to the idea of how to bring cultures and organizations together to maximize potential without damaging a good organization in the process. So we hope the future for Middle Atlantic is better as a result of this combination.”