Why This Matters to Distributors: Rexel is using technical services, earlier involvement in customer projects and acquisitions to expand its infrastructure business. Its strategy highlights opportunities for distributors to compete on engineering expertise and project support while managing the pricing, inventory, and service demands of larger contracts.
Rexel is expanding its role in data center and industrial infrastructure projects, using engineering services, earlier customer engagement, and a pending $1.4 billion acquisition to capture more business as North American demand accelerates.
The electrical distributor’s third-quarter update detailed how it is pursuing more complex projects and broadening the services it provides. Its planned acquisition of Chicago-based GCG would add engineering, custom assembly, and specialized connectivity capabilities, supporting a strategy that increasingly puts Rexel alongside customers during project planning and product selection.
“Our growth segments, data centers, energy transition, and industrial automation are visibly driving the growth,” CEO Guillaume Texier said during the company’s third-quarter sales conference call. “This is exactly the repositioning we have been working on with our Axelerate 2028 strategic plan.”
Rexel’s reported sales increased 14.6% in the third quarter from a year earlier. Sales rose 11.4% after adjusting for acquisitions and divestitures, currency movements and the number of selling days, its strongest quarterly growth since 2022. For the first nine months, reported sales increased 6.2%, while adjusted same-day sales grew 7.3%, according to the company’s Oct. 22 announcement.
North America accounted for 51% of quarterly sales and provided the clearest evidence of the strategy’s progress. Same-day sales increased 17.4% in the region, including 18.2% in the United States, executives said.
Chief financial officer Laurent Delabarre said U.S. data center sales more than doubled, reaching approximately 13% of U.S. sales. The business contributed about 11.5 percentage points to the country’s same-day sales growth.
“Two points to highlight here,” Delabarre said. “One, we are outperforming a market which is itself strong. Two, we are moving upstream in the value chain.”
Customers are approaching Rexel earlier as equipment lead times increase and supply chains face pressure, Delabarre said. Those discussions give the distributor more opportunities to help select products, identify alternatives, and plan deliveries.
Texier said earlier involvement also gives Rexel a greater role in defining project requirements.
“It’s more pre-discussions, which is a positive for us because we have a chance to be involved in the definition of the project,” he said. “Each time we add more value, we are more interested.”
That earlier engagement has not materially lengthened the time required to fulfill the company’s backlog, Texier said. Instead, customers are beginning discussions sooner to address potential availability problems.
Rexel’s North American backlog exceeded $3 billion and reached a record, increasing 42% from the end of 2025. It represented approximately 3.4 months of total sales or 8.3 months of project activity, executives said. Data centers accounted for about one-quarter of the U.S. backlog.
“That gives us a level of visibility we have rarely had,” Texier said.
The backlog extends beyond data centers to industrial automation, airports, aerospace, water and wastewater projects and other infrastructure work. Texier said most of the activity represented by the backlog would generate sales next year, although some would be completed before year-end.
Rexel’s acquisition strategy is designed to strengthen the technical capabilities supporting that business.
The company agreed on Sept. 25 to acquire GCG from Audax Private Equity in a transaction valuing the business at approximately $1.4 billion. GCG operates 16 locations, employs about 950 people, and is expected to generate more than $1.1 billion in 2026 revenue. The acquisition is expected to close by year-end, subject to regulatory approvals and other customary conditions.
GCG supplies specialty wire and cable, connectivity, power, and engineered products for critical infrastructure. Its services include engineering, custom assembly, product modification, kitting, testing, and rapid fulfillment.
More than 75% of GCG’s revenue incorporates value-added products or services, according to Rexel. The company plans to bring those capabilities to its broader customer base while improving purchasing and logistics efficiency.
“GCG is a great illustration,” Texier said. “It has the largest exposure to structural growth markets, and the deepest value-added content of any business we have acquired.”
The deal would be Rexel’s largest acquisition in more than 15 years. Texier said financing was secured and reiterated the company’s goal of completing the transaction by year-end.
Industrial automation offers another way for Rexel to participate in infrastructure investment.
Delabarre said U.S. industrial automation sales increased about 20% in the quarter. Texier attributed the growth to demand connected to data centers, several large industrial orders, and a broader recovery in manufacturing investment.
Some of that business comes from supplying original equipment manufacturers that build data center cooling systems and equipment for related power infrastructure. The opportunity therefore extends beyond products delivered directly to a construction site.
“One of them is that a part of this acceleration of industrial automation is probably linked to data centers, which means that we are also selling industrial automation products to OEMs, manufacturing cooling systems, for example,” Texier said.
Large aerospace orders also supported the quarter. More broadly, Texier said uncertainty about tariffs and international trade was encouraging some manufacturers to expand production capacity in the United States.
“People are hedging their bets and debottlenecking or increasing capacity in North America and especially in the U.S.,” he said. “We are seeing a little bit of that too.”
The expansion into larger projects also presents operating challenges. Such contracts carry lower gross margins than local branch business, Texier said, while North American sales commissions, salaries and medical benefits are increasing.
Rexel is working to improve the profitability of its data center business. Texier said those operations were approaching the overall profitability of the company’s North American business, narrowing a gap executives had previously identified.
Pricing discipline remains a priority. Rexel passes supplier increases through to customers, although existing project agreements can delay implementation, Texier said. In weaker markets, the company has also declined some business to protect its margins.
“There are several countries where we would have been in a position to deliver slightly even higher volumes, and we have not done that to protect our margin,” he said.
That approach is particularly relevant in Europe, where same-day sales increased 4.5% but demand remained uneven. Sales of heating, ventilation and air conditioning equipment, solar products and electric vehicle charging products increased approximately 13%, Delabarre said.
Texier said European sales volumes were flat throughout the first nine months, with electrification demand offsetting weakness elsewhere. In France, growth increasingly reflected market conditions rather than additional market-share gains.
“The growth this year is more market-driven,” Texier said. “We are not gaining market share anymore, and one of the reasons also is that this is one of the countries where we are quite active in protecting margin.”
He said solar, heat pumps and permanent air conditioning systems offer continuing opportunities as customers reassess energy costs and building needs. However, demand remains sensitive to subsidies, tax incentives, and energy prices.
Rexel also expects a more limited data center opportunity in Europe than in North America. Texier said construction was only beginning to follow European project announcements, while Rexel’s operations there are more focused on local customers than large infrastructure projects.
“I would expect you to see a little bit of that starting next year,” he said. “But it is never going to move the needle as much as it does in North America.”
In North America, executives said they had seen no evidence that customers were accumulating inventory or buying ahead of their needs. Rexel maintains similar discipline in its own purchasing.
“On our own inventory, we do not speculate on pricing,” Texier said.
Delabarre said larger contracts had not materially changed the company’s working capital needs. Customer advance payments can help offset earlier product purchases, while Rexel continues to monitor credit exposure and payment terms.
Texier also said the company had seen no slowdown in data center orders or discussions with major cloud operators. He estimated the backlog contained 100 data center projects, with no delays or cancellations at the time of the call.
“In our discussions in the quoting activity with the hyperscalers, we don’t see at this stage a sign of a slowdown,” he said.
Rexel raised its full-year same-day sales growth forecast to approximately 7% from approximately 5%, its second increase this year. Texier said the slower fourth-quarter growth implied by that forecast reflected tougher comparisons, unusually large third-quarter orders, and seasonal air conditioning demand.
The GCG acquisition and changes in Rexel’s markets could also prompt a reassessment of its longer-term plans.
“At some point, probably during next year, it will be time to update people about what our midterm vision is,” Texier said. “That’s obviously not today.”
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