The SNIPS 2021 Industry Icon, David Daw, wrote the September cover story for SNIPS: Covering how the 2000s changed the HVAC industry.
While his focus was on HVAC machinery, he also covered the demise of Engel reps; Lockformer and IPI’s, and other machinery manufacturers’ dealer networks; and the national consolidation of local distributors that lead to large regional HVAC super-wholesalers.
Here’s an excerpt from his latest installment from his series on HVAC history, referencing a patent infringement letter by CTI of Elmsford, New York, that targeted competing plasma cutting systems and CAD systems in 1992. The resulting losses threw the entire HVAC industry into chaos. Likewise, industry titan Lockformer declared bankruptcy in 2003, due to the damages and remediation costs of cleaning up solvent mishandling from the ‘60s and ‘70s in Lisle, Ill.
“Had Met-Coil not lost the CTI suit and had it not been for the Lockformer’s environmental bankruptcy filing, the HVAC machinery world would be quite different today,” Daw writes. “All machinery manufacturers to some degree are facing distribution issues today: Securing quality sales and service outlets or do it themselves. However, some old-line dealers have successfully navigated these seismic changes and are doing a good job: Handy, Gladwin, Hercules; and Conklin Metals come to mind, but not many others.”
He says these dynamics hold true for wholesale distributors as well. The children of HVAC distribution dealers often sold off the interest in the family businesses. Some of these companies were “roll-up” acquisition wholesalers, like in the New England market.
“I was not aware of Homans Associates in New England during the 1970s,” Daw says. “When I returned to Ductmate in 1986 to head up sales and marketing, Homans was a Ward dealer along with supply distribution agreements with many of the companies that HVAC contractors rely on for their everyday needs: Ductmate; Duro-Dyne; Gripnail; Hardcast; and ductliner manufacturers.”
Today Homans has multiple branches throughout the Northeast and a division of WATSCO, one of those roll-up distributors – publicly traded on the NYSE – that in addition to Homans, subsidiaries include: East Coast (acquired Three States Supply) with multiple branches throughout the Southeast; Baker-Coastline; and others.
Other old-line HVAC supply distributors have also grown, but without being “rolled up.” This includes MacArthur Co. of St. Paul, Minnesota; Gensco/Slakey Bros. (Northern and Southern West Coast, respectively); Denver based Hercules; American Metals, Springfield, Illinois; Conklin; and Handy until 2022.
“To my knowledge, only Hercules, Handy, Conklin, East Coast, and Lyon-Conklin out of Baltimore, a division of Ferguson, have both HVAC machinery and supply product lines,” Daw concludes.
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