Graybar Electric CO Inc

Business overview

Graybar Electric Company, Inc. is a leading North American distributor of electrical and communications and data networking products, providing related supply chain management and logistics services. The company serves various markets including construction, commercial, institutional, government, and industrial. As of September 30, 2020, it stocked around 110,000 products from approximately 4,500 manufacturers, with a primary business focus in the U.S., along with operations in Canada and Puerto Rico.

Revenue model

The company generates revenue by distributing electrical and communications products, with no manufacturing capabilities. Revenue includes sales of purchased items along with the associated logistics and supply management services provided to its customers.

Competitive strengths

• Established relationships with over 4,500 manufacturers
• Wide range of over one million distributed products
• Excellent local access to inventory with multiple distribution facilities
• Strong employee ownership structure

Risk factors

• Limited appreciation potential of common stock due to the company's purchase option
• No public trading market for common stock or voting trust interests
• Ability to declare dividends is at the discretion of the board
• Concentration of voting power in the voting trust may deter potential changes in control

Use of proceeds

The proceeds from this offering will be added to working capital, primarily to replenish amounts previously used to purchase outstanding shares of Common Stock, and may also be used for repayment of short-term debt related to working capital.