White Cap purchases Kel-Welco supply company

Kel-Welco, a construction supply company, has already begun to expand its product lines, retail space and staff in conjunction with its April acquisition by White Cap Industries.

The Springfield store will operate through the rest of the year as Kel-Welco, A White Cap Company, before changing its name to White Cap Construction Supply.

"We don't want to throw (the name change) on the customers and throw them off. We've been around for 28 years, so people know us throughout the nation as Kel-Welco," said Kent Eimers, branch manager of Kel-Welco's Springfield location.

White Cap is a fast-growing contractor supplier headquartered in Costa Mesa, Calif. It currently has 62 locations in 13 states and is attempting to be a coast-to-coast company by year end, according to Dan Tsujioka, White Cap executive vice president.

Prior to the acquisition, Kel-Welco's focus was on small tools, fasteners and supplies for the construction industry. The new company will be expanding into concrete and specialty items, Eimers said.

The Kel-Welco purchase was White Cap's first move into the Midwest.

"The major reason we acquired Kel-Welco is they have a strong management team, they have great associates working for them and they're motivated. They have great relationships with the markets they serve," Tsujioka said.

Kel-Welco was created in a garage in Omaha, Neb., by two power-tool salesmen in 1975. In 1978, it moved to a commercial building in Omaha. It grew into a privately-owned company with nine branches in Colorado, Nebraska, Iowa, Missouri and Arkansas. Eimers declined to divulge the selling price of those nine branches.

"It was just an opportune time (to sell); we've been in business for over 28 years. To compete in the markets you grow very quickly or you get swallowed up," Eimers said.

The former staff and managers of Kel-Welco are still in place. Kel-Welco had approximately 150 employees; White Cap has about 1,500 employees, said Eimers. The Springfield store currently has 10 employees and plans on adding more sales staff as they grow, according to Eimers.

Kel-Welco's revenues for all its branches in fiscal year 2002 were in excess of $30 million, said Eimers; White Cap's sales in fiscal year 2002 were over $500 million. Kel-Welco is expecting 20 percent growth in its first year operating under the White Cap umbrella, Eimers said.

Eimers said the store has already expanded its product lines tremendously, and has definitely noticed an increase in revenue since the acquisition, although no dollar amounts were available. "We're busier every day," said Eimers.

To keep up with its product line growth, Kel-Welco will be expanding from its current 10,000-square-foot building to 15,000 square feet with outside fenced-in yard space. A typical White Cap store could be as much as 30,000 square feet, said Eimers, but "it won't happen overnight, as far as handling everything that White Cap does. Every day we're looking into additional product lines."

Kel-Welco now has more buying power, and the ability to make more products and more services available to customers. "We'll be more of a one-stop shop to more contractors than we have been in the past," said Eimers.