Watsco, Inc. 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.
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.