Grammar Electrical acquires ADSEL
Grammar Electrical has shown its ambition to become one of New Zealand’s top 10 largest electrical contracting businesses with the purchase of ADSEL Electrical. Family owned Grammar Electrical Limited (GEL) has grown dramatically in recent years from a turnover of $1.4 million four years ago to an expected $12 million in turnover in the next […]
Grammar Electrical has shown its ambition to become one of New Zealand’s top 10 largest electrical contracting businesses with the purchase of ADSEL Electrical.
Family owned Grammar Electrical Limited (GEL) has grown dramatically in recent years from a turnover of $1.4 million four years ago to an expected $12 million in turnover in the next financial year with the acquisition of ADSEL.
From small scale residential electrician jobs through to large commercial and industrial projects, Grammar Electrical provides professional electricians for any job type in Auckland.
Grammar Electrical director Aaron Dempsey (pictured) says the purchase brings Grammar’s specialisation in small electrical jobs, together with ADSEL Electrical ’s leadership in Auckland’s commercial fit out sector.
“Grammar and ADSEL combined now have more than 40 qualified electricians on the ground, making it possible to compete on mid to high-level construction projects that have minimum staff requirements as part of the tendering process. The acquisition of ADSEL also enables us to enter a new market in which only a handful of Auckland electrical companies are currently able to compete,” he said.
Dempsey says that the single greatest benefit of the merger of these two electrical companies will be allowing GEL to capitalise on a number of operational synergies and definitive reductions in overheads.
“ADSEL’s primary contracting business is underpinned by lucrative maintenance contracts for a number of established Auckland buildings like the BNZ tower. Located on the city fringe and with low staff turnover, we are strategically positioned to benefit from Auckland’s growing commercial fit out and maintenance market,” Dempsey said.
“This is a natural partnership of two leading brands, both competing with each other in the same market segment, and on numerous key commercial fit-out and maintenance contracts’” says Dempsey.
“Removing ADSEL as a direct competitor gives GEL both, improved pricing power and a significantly greater market share,” he said.
Dempsey says that the business outlook is favourable, with apartment building activity in Auckland forecast to continue to grow strongly over the next 2-3 years. A shortage of housing driven by continuing population growth in the Auckland region and the Labour Government’s affordable housing programme, KiwiBuild, are key drivers of forecast growth.
“ADSEL is well positioned to take advantage of these favourable market conditions over the medium term. The current pipeline of secured and tendered work is strong.”
Dempsey also believes that supporting his employees to develop a specialisation is good for morale and GEL overall, not to mention that this is now possible with the increased scale of the business.
“Sometimes people tell me that our business looks top-heavy, but I believe that having more back office people taking the paperwork off the tradesperson enables them to spend more time on site, improving efficiency and morale,” he said.
Dempsey says that this acquisition is going to be the first of many for GEL in the foreseeable future. “Our mandate is simple – we’re looking to buy electrical businesses with verified potential that work within a specialised niche with a high barrier to entry,” he said.