When several now-global distributors were busy gobbling up competitors in the 1990s, Sager Electronics maintained its laser-focus on its specialty products – IP&E—and its position in the Americas market. Although not historically acquisitive, Sager – with its announcement it would acquire Norvell Electronics Inc., headquartered in Carrollton, Texas, -- has made its second acquisition in as many years.
In June 2014, Sager Electronics acquired PowerGate LLC, a premier North American power specialist distributor. Sager has since staked out its ground in power, forming the specialized Sager Power Systems within the organization. “Our acquisition of Norvell further accelerates our power growth strategy. The key aspect of this acquisition is Norvell’s value-added capability, which is central to our strategy and continued growth with customers and suppliers. Sager Power Systems now has the people, the lines, the inventory, and the value-added capability to fulfill our vision of being a market leading power distributor,” said Frank Flynn, president of Sager Electronics.
Sager President Frank Flynn
One notable acquisition Sager made during the distribution-industry consolidation heyday was California Switch & Signal (CalSwitch) in 1999. At the time Sager was strong on the East Coast and CalSwitch bolstered Sager's position in the West. CalSwitch's revenue at the time was estimated to be $60 million.
One of the key differences between the Sager of the 1990s and now is its affiliation with Warren Buffett’s Berkshire Hathaway companies, a deep-pocketed parent that lets good companies run themselves. Berkshire Hathaway made its first foray into the electronics distribution market with its acquisition of TTI Inc., which in turn purchased Mouser Electronics and then Sager. With the exception of consolidation within the so-called “back-room” operations of the distributors – IT, finance, accounting and to some extent supplier relationships—each company has maintained its distinction in the marketplace. TTI remains a highly-focused specialist in IP&E with extensive supply-chain capabilities. Mouser is one of the largest catalog distributors serving design engineers. While both TTI and Mouser serve global customers, Sager has remained focused on the Americas and has retained its deep-dive expertise in the products it sells.
Sager now services its growing customer base via its headquarters and state-of-the-art distribution center in Middleborough, MA, a national network of field account representatives, a team of field application engineers and power sales engineers, and strategically located service centers. Berkshire Hathaway has also left the management of its distribution companies fully intact.
“The Norvell team is excited to join the Berkshire Hathaway family of companies as part of Sager Electronics and its specialized group, Sager Power Systems. We see a great opportunity to offer our expertise on a much larger scale with access to more customers who require value-add solutions,” said Chris Tvrdik, President of Norvell Electronics. “We look forward to joining a company with a world class power line card and dedicated technical resources serving power customers, with the vision and commitment to being a leader in the power space.”
Norvell Chairman A.W. Tvrdik will retire upon completion of the acquisition. Chris Tvrdik, Norvell’s president, will join Sager Electronics as vice president value added sales and service. The acquisition is subject to customary closing conditions. The transaction is expected to close by July 6, 2015.
Sager is one of the oldest—if not the oldest—electronics distributor still in business. Sager Electronics began in 1887 as a single storefront in downtown Boston that serviced the growing interest in radio technology. Under the vision and leadership of Joe Sager, the company rapidly established a statewide distribution system for home radios and related components. To further stimulate demand, Sager sponsored a weekly musical radio show and, in 1926, Sager developed the format for play-by-play broadcasts of the Boston Bruins' hockey games. Despite the onset of the Great Depression, Sager continued to grow by bringing new electrical products to Massachusetts' consumers. At the onset of WWII, Sager reacted to the critical demand for electronic components. The company refocused its operations to supply electromechanical components to the U.S. military. This transition positioned the company to emerge as the leading regional electronic component distributor at the beginning of the consumer electronics market in the 1950s and 60s.
Sager has also historically been a family-owned business. Until the purchase by TTI, the Norton family was the largest shareholders of Sager with most of its family members working at the distributor. Current President Frank Flynn also has a family legacy at Sager, as do many of its existing employees.
Sager Electronics, a wholly owned subsidiary of TTI Inc., a Berkshire Hathaway Inc. company, is a North American distributor of IP&E components from leading manufacturers worldwide. Grounded in over 125 years of innovation and service, Sager Electronics provides customers and suppliers a unique combination of operational excellence and innovative business solutions through its Distributing Confidence business model. www.sager.com.
Norvell Electronics Inc. specializes in power supply integration for medical, industrial, telecom, test and instrumentation, and more. Since 1955, the company has collaborated with customers to develop innovative power supply solutions – from design and component sourcing, to assembly, testing, and distribution. Its goal is to be the industry’s number one source of power product integration and through ongoing investments in customer support services, engineering expertise, and manufacturing and testing capabilities. www.norvell.com.
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