MIAMI, April 12, 2021 (GLOBE NEWSWIRE) — Watsco, Inc. (NYSE: WSO) announced that it has completed the acquisition of Temperature Equipment Corporation (TEC).
Founded in Chicago in 1935, TEC serves approximately 10,000 HVAC customers from 32 locations in Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri and Wisconsin. TEC generated sales of $291 million in 2020 and provides a broad product offering including residential, light-commercial and applied HVAC systems from Carrier as well as parts, supplies and accessories sourced from approximately 1,200 vendors. More information about TEC can be found at www.tecmungo.com.
Consistent with Watsco’s entrepreneurial approach, TEC will operate as a stand-alone joint venture between Watsco and Carrier Global Corporation. Watsco owns 80% of TEC and Carrier Global owns 20%. The transaction is expected to be immediately accretive to Watsco’s financial results.
Albert H. Nahmad, Watsco’s Chairman and Chief Executive Officer, commented: “We have deep respect and admiration for TEC’s legacy and long record of success. Skip Mungo and his team have built a great company and they will continue TEC’s focus on growth with their name, identity and unique culture in what will be new markets for our company. We look forward to supporting their ambitious growth plans and introducing our innovative technologies to accelerate their digital capabilities as part of the Watsco family.”
The acquisition of TEC is the latest example of Watsco’s strategy to invest in growth opportunities and expand its industry-leading position. Since entering HVAC/R distribution in 1989, Watsco’s revenues have increased from $64 million to a current run-rate of $5.3 billion following a unique “buy and build” philosophy. The core principles of this philosophy include:
- Recognize, respect and sustain the legacy of great businesses;
- Instill a passion for entrepreneurism, innovation and continuous improvement;
- Operate as a local business, no matter how great Watsco’s scale, by empowering local leaders;
- Think and act with a long-term focus through equity-ownership to attract and retain great performers;
- Build an unmatched repository of talent, product expertise and strategic value with OEM-partners;
- Develop and launch the industry’s most customer-obsessed suite of technologies; and
- Remain conservative and risk averse with our finances to enable investment in growth at a low cost of capital.
Watsco is actively seeking additional opportunities to invest in what remains a fragmented $40 billion North American HVAC distribution industry.
About Watsco
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 632 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.
