The company plans to sell its submersible motor products in North America directly to water systems distributors beginning November 2004.
R. Scott Trumbull, chairman and chief executive officer of Franklin Electric, states, “These changes are significant for us and for our customers and represent our efforts to respond to the changing market conditions in the submersible water systems industry. In recent years, market conditions have changed; there has been a significant consolidation of industry players at both the submersible pump OEM and distributor levels. In light of these conditions, we believe that changes to our water systems distribution channel to allow for direct sales to distributors are necessary, appropriate and in the best interests of Franklin and the industry we serve.”
As to the company's proposed acquisition of JBD Inc., Mr. Trumbull comments, “As we discussed our direct sales plan with our major distributors, they encouraged us to consider acquiring a pump product line in addition to selling our motors directly to them. These distributors pointed out that JBD Inc. has a reputation for excellent quality and hydraulics technology. As a long time supplier to JBD, we already were aware that it has a seasoned management team and operates out of a well-maintained 250,000-square-foot facility in Little Rock, Ark.”
Commenting on the relationship between the company's distribution channel change and its acquisition of JBD, Mr. Trumbull states, “We believe our acquisition of JBD will enhance our plans for selling motors directly to distributors. We also believe that it may open the door to new longer-term growth opportunities for Franklin. It should enable us to approach our core global water well market from a total systems perspective. We now can combine our submersible scale and technology with hydraulics skills to produce products to help meet the world's growing need for water.”