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2026.09.30 | TB | Power | MacLean Power Systems & Delta Star Deal

原标题：MacLean Power Systems – Analysis If Acquisition of Delta Star & M&A Integration Progress

#power #industrials

Third Bridge · 2026-09-30

Analyst-led • 29 Sep 2026

Companies: HUBB US, BX US

Andy Gregory (AG) Area Sales Manager at Reinhausen Manufacturing Inc

Ryan Keeney (RK) — Third Bridge Sector Analyst

Agenda

Key Insights

Introduction

RK [00:00:06]: Welcome to Third Bridge's Interview entitled MacLean Power Systems – Analysis If Acquisition of Delta Star & M&A Integration Progress. I'm Ryan Keeney, and I'll be facilitating today's Interview with Andy Gregory, former VP of Sales at Power Grid Components.

Andy, before we start today's Interview, please state I agree or I disagree to the following statement: You understand the definition of material non-public information and agree not to disclose any such information, or any other information which is confidential, during this Interview.

AG [00:00:36]: I agree.

RK [00:00:38]: Could you please begin with a brief introduction of your background?

AG [00:00:42]: Sure. I started off in the military as an electrician on submarines for nuclear power plants, supervised the running and maintenance of those, then worked in ISO New England, which is a grid operator for New England for the six states there inside the control room. I worked in some subsea oil and gas electronics for a few years while going back to school down in Houston. Then, I migrated over into thermal energy storage and then to utility product sales. I've done insulators from substation insulators to pole insulators and then migrated over to instrument transformers with station service power. Then, when we were purchased from another private equity firm, [Firm] bought us, and we combined everything with PGC, combined rep channels and the sales team for Power Grid, and we divided it out. I took over switches as well as insulators for that company in addition to the instrument transformer line. Then, probably about six months after that integration is when I departed.

Questions

00:02:14] Across the gamut of different electrical components, have you ever seen an investment time in terms of CAPEX from utilities and electricity generation similar to what expect to see in 2026? Is there any precedent for this, or is it completely new?

AG [00:02:42]: No. For the last five years, there's probably been more capital dumped into the grid than ever before being that, well, since it was built to begin with. That's typically due to consumer markets with industrial base growing possibly 1% to somewhere between 1% and 2% per year. The generation that you build and put on, all of that takes a bunch of capital, but that is only used for about four hours in the summertime during the peak demand. No one wants to have a bunch of unused capital sitting there not supporting the grid. Now, with all the data centre and population shifts and the economy as it is, you're getting much more growth than you've ever had, hence the opportunity.

00:03:35] You noted that capital has been dumped into the entire electrical components market for the past 4-5 years. Would you expect that to continue for the next 4-5 years? Are we potentially nearing a peak?

AG [00:03:58]: No, I would expect it to continue. Typically, private equity firms buy for a certain window of time. They're already holding longer. I can't imagine that they don't feel they're going to get their money back out of these companies, and they're still buying, and I still see consolidation everywhere, and long-term orders. I can't imagine that you'll see it go down over the next five years.

00:04:28] Thinking about the transactions where independent or PE-backed manufacturers change hands, historically and typically, would you see actual operational changes when it comes to manufacturing efficiency, plant footprint or anything such as that? Is it an allocation of capital in name?

AG [00:04:51]: No, you're going to see operational efficiencies. If you can imagine, you had a fragmented market with a lot of mom-and-pop type owned businesses where maybe there's no succession planning. You had PE firms targeting places like that. You can see that maybe the owners were happy making what they were making. When you go in there, you find many opportunities to drive efficiency with minimal amount of CAPEX applied. That will raise your EBITDA to whatever multiple you need to during the time that you hold it, so you can maximise your exit.

00:05:29] How prevalent would you say that PE is in the US electrical components market overall? If we've seen this consolidation, are we talking about 20-30% of the manufacturers being backed by PE?

AG [00:05:48]: I mean, I really couldn't ballpark that, but what I have witnessed even with my last place, [Firm], in particular, now owns a full circle of the market. They can manufacture, test, install all of those things for an entire substation almost. Then, they own a utility as well in Texas. You have basically the start all the way back to the rate payer.

RK [00:06:20]: You said almost. What is it missing?

AG [00:06:23]: I would say they're missing structure, like, the actual metal structure to put things on in the substation and then they're missing breakers and relays that I can think of off the top of my head for components.

00:06:39] When we think about breakers, structures and relays, are there any dominant or well-storied North American manufacturers of those different subcomponents?

AG [00:06:58]: Sure. They're pretty large players when you think about Mitsubishi, MEPPI is what they're called as I recall. Then you've got ABB, you can get breakers out of, Siemens, you can get breakers out of. Highly technical parts, high CAPEX dollars to get them, that's going to be a harder play to get into. There's also one called Meiden, I don't know who owns them, but if they're privately owned, I'm sure that that could probably be eyed to be bought. That's what I think of breakers, maybe Eaton as well.

00:07:41] When we think about utility components overall – not just within breakers, structures and relays – are there any active companies that are facing a boom right now? Are there any specific players that you would expect to be sold, consolidated or merged over the next 1-2 years, aside from MacLean Power Systems, Delta Star and PGC [Power Grid Components]?

AG [00:08:08]: I mean, not that I know of. The thing is the amount of dollars that are being thrown around, people that wouldn't typically sell. I was surprised that Delta Star sold because as I was aware, I was fairly certain they were an ESOP, so employee-owned. You would have had to get, however their structure is, a bunch of people to agree to it. I was surprised they were able to pull that off, but they did. I really don't think.

00:08:43] MacLean officially merged with PGC in March 2026. Now that we're entering Q4 2026, how well do you think the integration process of the two companies has progressed?

AG [00:08:58]: Not very well. You've got, MacLean Power is typically a distribution type company where you look at small parts and pieces that are sold through distribution based off what I can see. That's different than a technical sell where you're selling substation switches or instrument transformers and all that stuff. MacLean is bigger than Power Grid Components. I think that that management team is what won, so won out. You'll end up with two different sales teams, one being more on the technical end of selling and understanding. Then the other one, not so much. Then the other part of having two different sales channels in terms of rep network. There's been so much buying up. There's a risk there that no matter what rep you have, you'll have competing lines on them, and those reps are not going to want to change because they keep seeing more and more consolidation, which puts more and more of those companies' money controlling their actions. Typically, they don't like that.

When you think about that, one might be very good for MacLean selling in there, but the customers on the other end for Power Grid Components don't like that rep, which will prevent them from switching well. You'd probably see MacLean trying to hire different reps on big accounts, hire them directly to try to win that business in an effort to help consolidate their rep firms. I don't think that that's going to be very successful mainly because of all of the consolidation that's already happened. Those networks are very wary of this, because eventually, it gets so big and you've kicked off all these other manufacturers that are left that are private, you're no longer repping them, they go find somebody else and then you run the risk of that large firm, in this case, MacLean Power Systems, they could just go and take their business direct. Then you have a rep firm with nothing to sell.

00:11:13] How would you go about developing MacLean's sales channel post integration of PGC? The merger has already happened, and the company is now acquiring Delta Start as well. What would you do to make the best case possible here?

AG [00:11:32]: I'd probably go about doing it… I would have a distribution channel set up to where you basically supply the Wescos, Anixters, Irbys of the world with high-moving parts. Those guys have contracts with the different utilities where you can see what their forecasted annual demand is. You work contracts to supply that. You bid against other people for those parts. The more you have, the more scale you can get, to the more competitive you can get. Then, I would have a team going after EPCs to help educate them on the products to get specified into the build specifications for projects. That way, business will be driven to you no matter who cuts the orders. I would be going around the utilities and making sure I would be using a rep network to do that because they've got historically better relationships there because they live there and have multiple solutions as opposed to just whatever one manufacturer offers. They tend to get better information. I would work to get into those approval lists as well. Then, on spot buying, I would try to build packages with the most amount of equipment you could put in there, so you could help spread pricing across to make it more attractive as compared to your competition. The more I think about it, your probably number one competitor is Hubbell would be my thoughts. That's how I think about it.

00:13:05] How much spot buying vs contracted buying would you typically see in one year? Do you expect spot buys to be much higher in the current explosive demand environment?

AG [00:13:18]: No. Usually, you get spot buying from projects where something was short noticed or something broke. That way, you can get a few units out. Typically, there's been more and more planning going along due to the lead times being so far out. People aren't waiting as long to get these things done anymore. You'll still have spot buying, but it will be to get people out of the bind for the most part, at least in my opinion.

00:13:55] You mentioned Wesco, Anixter and Irby, some of the largest electrical distributors. How strong do you think MacLean or legacy PGC's relationship bases are with the different distributors compared to those of peers such as Hubbell? Do you think they have a leg-up when it comes to strong, sticky relationships with the distributors? Is there more work to be done?

AG [00:14:18]: I'm sure there's more work to be done. The only reason I would go through a distributor typically when I was working for Power Grid Components was not because… The only reason I would do that is to bypass terms and conditions I didn't like. Basically, the distributor will take parts and mark them up however many percentage points and then the end customer is paying for their own terms and conditions because we didn't want to take them. That's where the value I see in the distributor for that equipment because they don't hold it and store it. They're literally just cutting a purchase order to us, marking it up and selling it to the end utility because we didn't want those terms. Typically, we would do that a lot in California. Other than that, we'd prefer to go direct, so you can actually own the customer relationships along with your rep network. Typically, you'll have star alliances or whatever they want to call them for whatever utility, but each one of these distributors will go and they will bid work for however many 3-5-year blankets for a specific utility for whatever parts lists and usage that they think they'll use and then that will be awarded to that distributor.

If you think of, like, Tucson Electric Power, they've been with Border States for, I think, 30 years, a long time. Sometimes they'll go out to the market, price it with other distributors to help get Border States back in line and then they re-sign that contract with Border States. You really don't have to have a great relationship with them because if you've got your parts specified, they have to come to you anyway. I'm sure MacLean, based on the products that I've seen like anchors and all pole line hardware, you need to make sure that you're going and hitting those distributors because there's a lot of competition there, whereas the Power Grid Components parts weren't as much.

00:16:20] It seems as if the distribution portion of the revenue and overall profitability pie is less important than direct sales, either to EPC [engineering, procurement and construction] players or to end utilities themselves. Is that fair to say? Would you say that the majority of revenue and profit from MacLean is delivered through direct sales?

AG [00:16:46]: For MacLean, it's probably direct sales to an end customer… Sorry, it is likely through distribution based on the parts that I see. That would be my guess on that.

00:17:04] What makes an EPC or end customer choose MacLean over competitors? Does MacLean have any notable equipment performance, pricing or lead time advantages in the various brands that roll up underneath it compared to competitors?

AG [00:17:20]: Not really that I know of. My thought is probably going to be lead time and price. The first name of the game, you got to be approved by the end customer, your parts have to be. Then, you're making a standard part from that point. Really, it's how fast can you get it and how much is it. You're going to be competing based off of that. Demand is so high right now, price is not such a big deal.

00:17:51] If price isn't such a big deal, are lead times getting more and more competitive? Are you seeing extended lead times for different subcomponents?

AG [00:18:03]: For their products, I can't imagine that their lead times are what's going to be killing it. They're going to have tariffs and the executive order came out for non-Chinese goods. That can cause some stirs maybe in their supply chain, but most of the stuff that they're making is not complicated parts. I can't imagine that it will touch those parts. Really, it's standard parts. You're going to be competing against it and their lead times should have come down from one year or two ago just based on my experience with the supply chain now.

00:18:42] Could you expand on what happened to the supply chain 1-2 years ago and why you'd expect it to be stronger here, not just for MacLean, but for the overall industry?

AG [00:18:52]: I think you had a lot of people coming in and quoting things saying that they were firm commitments. You have multiple manufacturers to think of, like, five people calling to get quotes from you and you count it in your system as all… Maybe it's 100 units, but five people bid them. It looks like 500 units. This market has not really experienced that ever. They weren't good at saying, "Oh, this has doubled or tripled or quadrupled." It made lead times stand out, and it took a long time to figure out that a lot of that was bogus. You had factories that built some, so now they have extra capacity, but they're not using it because they figured out that the sizing wasn't as big. YoY, the sales are going up, whether that's due to the prices going up and tariffs going in, at least on the balance sheet, the dollars look higher. Maybe that doesn't correlate to the number of units sold because those prices have gone up. If you increase the price, you don't have to sell as many units to eclipse your previous year's sales. That would be hard for me to speak to.

00:20:13] Do you think the behaviour from customers of calling up reps to get multiple quotes and then accidentally double- or triple-counting is still going on in Q3-Q4 2026? Are we still seeing such high accelerated demand that customers are doing that? Has that tapered off?

AG [00:20:39]: You're still going to see that. They're just trying to get their stuff and they know a few different people that cover different manufacturers that make the same thing. They all call to try to figure it out and get things moving that direction. That's still occurring.

RK [00:20:55]: You think manufacturers have become savvy to it. They're not manufacturing over capacity. There's a lot of surplus in the system. They're much more aware that… Is that fair to say?

AG [00:21:07]: Yes. That is true.

00:21:12] Hypothetically, if I'm a customer calling you, and you get two calls from my competitors or peers in the industry, how would you discern who's a real order and who isn't?

AG [00:21:30]: We'll just ask about project information, specifics. We can look that up. We can also use AI to research it and make sure it's legitimate. Who is it coming from? Is it a known OEM or a known customer that we have good relationships with? You trust that that is true as opposed to maybe some Chinese EPC that calls you and is looking for a big package deal, it's always, like, I don't know about that. Then, sometimes at a factory, you can sell slots, so you could put… Which is probably relevant to Delta Star, they're probably selling slots, which with those slots, probably… My guess is that they're enforcing a down payment. Anyone who's not a non-refundable down payment, if you're not serious, I don't think you're going to be wanting to throw money away.

RK [00:22:25]: That's some of the behaviour that I've heard about in previous Third Bridge Interviews about GE Vernova, where you have these massive turbines or massive power systems. It sounds as if Delta Star would be a beneficiary of that. Are there other PGC or MacLean product lines that would also have a down payment system, or are the parts just too small for that?

AG [00:22:45]: Yes, they're going to be too small. There's a few parts that MacLean has that will have longer lead times, which you may get some of that action for. For the most part, it's going to be looked at, like, if you were to walk into Home Depot with nuts, bolts and screws, those are very important parts and you know you need them, but they should be there when you need them. It doesn't take a whole lot of forward planning because it's just not worth it. You need to focus on the pacing items.

00:23:19] You mentioned that sales are going up in 2026. If we think about dollars or percentages, by how much would you expect sales to go up in 2026 and directionally into 2027, compared to what we saw in 2024 and 2025? Are we talking about high-single or low-double digits in terms of actual sales dollars? How do you think about that?

AG [00:23:45]: I mean, I would be comfortable probably saying 8%.

RK [00:23:49]: 8%. This is interesting. Would you say that's price- or unit volume-driven?

AG [00:24:03]: Volume-driven.

RK [00:24:04]: It is volume-driven.

AG [00:24:04]: It's a mix of both, because (talking over each other 24.07).

00:24:05] When I think about tariffs and exposure to Asian or non-US components, historically, have PGC, MacLean and Delta Star been relatively US-based? Could there be some exposure to components from overseas?

AG [00:24:33]: You'll have exposure overseas for sure. A lot of those products are made in China or Vietnam or any of those things. When you think of Newell as a portion of it, I mean, most of their stuff is made in India and China, which is comparable to almost every other porcelain manufacturer when you look at Lapp or PPC or any of those, a lot of their products are coming out of China, not all of them, but a lot of their parts and components are coming out of there.

00:25:11] Would you say that more or fewer of MacLean's components are coming out of China or East Asian competitors vs a competitor such as Hubbell?

AG [00:25:23]: It would probably be the same. I mean, when you're building these assemblies, even though they have manufacturing plants, it's more like an assembly plant. When you think of switches, switches is a bunch of metal hardware that's… Some of it's made in the US, but the bulk of it is the insulators. Those insulators are typically made out of the country, usually out of China.

00:25:50] Should or will customers be excited about the prospect of MacLean having a significant number of brands under one umbrella? Could this be construed as a potential deterrent to customers – such as utilities – worried about single-sourcing or about one supplier having too much control over their spend?

AG [00:26:18]: Yes, it will. I mean, nobody likes that. Historically, all of these parts were driven by utility markets. Utilities have people and engineers that hang around there for decades. There's relationships there. They like to know people and know who they're buying from. All of this private equity that has come in has made it much more transactional, and that's not typically what they like, and they got burned during COVID with single or sole sourcing. It will be a concern, but there's not much they can do about it because it's not like they can go anywhere else other than a few of the big ones. If they get the opportunity to go with a small one, my guess is, they will.

The other side of that is if you don't offer… The problem or the risk there, if they do that or from a distributor that wants to throw off Hubbell for MacLean, the problem there is if MacLean doesn't have everything that Hubbell offers and the distributor just starts buying, let's say, 30% of what they used to buy out of Hubbell's product line, 30% of that disappears and moves over to MacLean, they'll notice that and say, "Hey, what happened to these?" Then, if they say, "We're just not sourcing it from you anymore," the distributor runs the risk of having the other 70% from Hubbell just saying, "All right, we're not going to sell to you anymore." Then, 70% of the parts that they would supply to their customer no longer have an avenue for them to get it because maybe MacLean doesn't offer it.

00:28:00] Over the next 2-3 years, do you expect to see major or material share shifts or distributor share shifts across MacLean, Hubbell or other peers? It sounds as if utilities are aware of the situation, and OEMs are obviously aware. Do you expect to see major market share shifts, or do you think the market will be steady?

AG [00:28:29]: No, I would say you're going to see market share shifts just due to whoever is getting bought up adds to the pie for the MacLean mothership. I don't think you're going to see any real seismic shifts in share until they both get their houses in order and figure out how to compete head-to-head.

00:28:55] Do you think MacLean or Hubbell is better-positioned to get their house in order? On the one hand, you have the major PE financing behind MacLean, but on the other, you have a major public entity such as Hubbell, so are there different dynamics here?

AG [00:29:11]: When I'm thinking about [Firm] and everything they've bought, they bought Sediver, which is a glass manufacturer, which makes high-end transmission bells. The US has a lot of transmission that's going to go in. Now they own that company, and they own Newell, which also makes porcelain bells and porcelain substation insulators. They've got that covered. Then they've got instrument transformers, which you need both in transformers and inside the substation in multiple locations. They also have station service power. They've got switches and then whatever else MacLean offers in totality and now they've bought Delta Star. I don't know if Hubbell owns a transformer manufacturer. I don't think they do, at least not for substation. It's looking more and more like you could go to MacLean and get a whole substation built. It looks like that's what they're trying to get to. Then [Firm] also bought Shermco, which is a very large testing and service organisation. You could theoretically package this to where you got something like Quanta, where Quanta can design, source all of the different things as a one-stop-shop where I don't think Hubbell can yet or I haven't seen anything in the market where Hubbell is trying to go that route.

RK [00:30:36]: Do you think that is a needle-mover for customers, or even for operators and builders? Do you think the positives of having a turnkey portfolio and being able to build the entire thing from the ground up will lead to outsized earnings?

AG [00:30:58]: It depends on how fast they can get it up and moving, but I would assume that if Delta Star was on the market to sell, they would have done their very best to load their books out and sell the best story to command the highest price to be bought at. I don't see how they're going to have a lot of extra capacity to bring on new equipment. When you have the executive order that came out about non-Chinese equipment, you will have unsophisticated customers, which I say that for data centres on the power side because they don't know that market. They don't know that thing. They just see it and say, "Oh, I'm not going to buy anything from China." For a Delta Star transformer, now they figure out, "Well, what can I do, when can I do it?" They try to find ways. I assume that if you can offer somebody a one-stop-shop, you'll probably get a lot of traction with that.

00:31:55] How often is there churn in component supply? If we think about the end users – the EPCs or the utilities – how often do you see them shift component spend from MacLean to a competitor or back and forth? Is there any precedent for this?

AG [00:32:17]: A lot of times, you're making standard parts. You do those relationships even when you're not selling because you're just waiting for the next guy to trip up. Typically, none of them make a bad part. Maybe they have an issue or maybe they get a new sales lead in there that just isn't a very likeable person and doesn't work with people, they get frustrated and just wait for them to have one screw up enough and then you get a call and say, "Hey, we want to shift a USD 10m spend to you. What can you do? Okay, great, you work down that way." I don't think you're going to have a whole lot of… That's why those rep networks are very important. You get to be at the right place at the right time and have the right relationships to help shift that over.

00:33:03] We've touched on the accelerated demand and the expectations for pricing to increase. What is the typical sales cycle for MacLean's electrical components across PGC and now across Delta Star as well? A lot of different equipment lines are folding up under what we're talking about. Do you expect the cadence of the sales cycle to change over the next 2-3 years as we see both MacLean's ability to offer this turnkey solution and the convergence of utility grid investment and data centre build-outs all happening at once?

AG [00:33:42]: I'm thinking that they've seen this problem for the last few years, and they've been investing money on it. I don't think you're going to run into a really long lead. When you look at it, the pacing item for a substation at the moment is typically a transformer. Then the transformer is limited by a bushing and those bushing factories haven't been built up enough yet to supply good quality bushings. People should be leery about letting foreign bushing companies come in to put those on your transformers because if that bushing blows out, it has a high likelihood of ruining your transformer. You end up pacing the market with this relatively small item which is occurring now. In terms of MacLean Power, the longest lead time item they're going to have is the power transformer. Anything else is going to be under that. I don't see that being a huge increase in lead times to get those items.

00:34:54] When the merger between MacLean and PGC originally happened, there was a debt financing that was multiple times oversubscribed, despite MacLean's high leverage. A lot of it was thanks to demand from lenders for the expected boom in the company's business as data centres potentially drive electricity prices to historic highs. Can we reasonably expect MacLean to see a material step-up in cash flow because of data centre development trends? If that is reasonable, when and how do you think this will happen? Would this be in 2027 or 2030, for example?

AG [00:35:47]: I'm not familiar with Delta Star's previous CAPEX looking at making their plant get bigger. If you said that you could make 100 more transformers a year, substation transformers, you could have that capacity bought in a day, which… 100 transformers is you built a new really large co-op in the United States somewhere and that could be consumed in a day. If they can get their stuff and build it faster and do all those things, then sure. I don't see why you couldn't do that. Then if you pair that in with a packaged deal, maybe you say, "Listen, I can do this, but only if you take our switches and this and that for the substation, we'll make it easy and price it effectively." Maybe you win work in those other areas that you normally wouldn't have won work because now you can sell them the transformer. You know that demand is going to be strong for them, so you can hold to it and say, "Well, if you won't, someone else will." They will.

00:36:57] We've outlined the growth trends within the broader electrical components sector, as well as why utility spend is high and what to expect there. Historically, what have been the indicators that demand is weakening? I'm sure you've seen some troughs and the ebb-and-flow of the cycles of demand. Historically, what is an indicator that says, "The unprecedented demand that we're seeing could actually be tailing off"?

AG [00:37:35]: You're not really going to see that very well. The problem is how much focus has been put on data centres and the amount of like even in Texas, where the governor has held off now putting a moratorium on data centres, so you can get through the election and then turn it back on. I think there's 220GW of demand that they want to put on the system. That's over two more Texas sizes of load that you want to add current day. You could measure it that way if you wanted to. You could look at all the different ISOs or RTOs and look at their demand queue, see how much is on there. If that starts to die off, you know that demand for future projects is going down, you look at it that way. I would look at the RTO, ISO workloads and see what those tell you to help get a broad thought on what's going on because they're the ones that have final approval on all these projects anyway, not just the utility. The utilities answer to the RTOs.

00:38:52] There's been a lot of discussion around where the data centre boom is a bubble, and what will happen if we see a majority or even a major amount of data centres delayed or cancelled outright, although I think the outright cancellations have been relatively rare. What does that do to these component manufacturers or OEMs? Do you think that could be an existential crisis for a company such as MacLean, especially given its higher leverage? Does its utility exposure and ongoing investment in the grid itself outside of data centres insulate it from capital boom and bust?

AG [00:39:31]: I would say that you had high demand from utilities before the AI boom came in. It might not be as lucrative, but they should still have a business case as long as they're lean to be making more money than they ever had. You have to remember, in 2018, 2017, when you went out annually for price increases, you would be fought over a 1% increase in price. Now those same parts that were sold in 2019 are double the price, and you can raise it 5-7% every year and people take it. Whatever you were doing before, they should be highly profitable in my opinion.

RK [00:40:18]: 5-7% price increase every year. Does that fully cover the tariff impact? Is that fully passing on the cost of…

AG [00:40:28]: Of course. Then you have people in the market that look at it that don't want to keep jacking with the customers, so they'll look at it and tariffs have been so erratic that they'll just do a price raise of what they think it might be, the customers take it and it's over and above the tariff and then those prices become sticky. Then when the tariff is taken away, that percentage is known. They're like, "Oh, Mr Customer, we'll take 5% off because the tariff went away." Short memories, that was a 12% increase when you went to the market.

00:41:05] Have you ever seen prices go down? Do you ever see discounting actions?

AG [00:41:11]: Discounted from what today's prices are, sure, maybe to win work, but a lot of times, their capacity is already full. I wouldn't expect that they're going to have a lot of wiggle room to need to fill up a factory. You've got some that want to only take highly profitable work and they can do that because they leave open factory capacity. Why work more just to make less profit? Work less, make more profit.

RK [00:41:41]: Do you think MacLean is a manufacturer like that? Have you heard that it's focusing on higher-profit work, or just taking whatever it can?

AG [00:41:55]: I'm not sure about MacLean, but I know Royal Switchgear was one, and there's not many companies that make power pots [parts], which ITEC does. They've got a lot of potential, in my opinion.

00:42:14] Were there any immediate performance or internal green or red flags at PGC that you would call out? Was there anything unique in terms of the company's manufacturing capacity, efficiency or even culture that would differ from other companies in the space?

AG [00:42:37]: I left due to the culture. It's a very private equity normal, in my opinion. You just get tired of everything being driven off of a spreadsheet and you'd have shipments that would… Partial shipments would go out just, so you could hit your numbers and then they weren't completed, so they'd come back in or you had three units that were sold and you shipped one unit at a time because it was done. You're trying to charge the customer for three different trucks, which I guess you can do that, but it didn't seem right to me at the time. Plus you couldn't get a good information to the customer and about when they were going to get projects, you just end up with meeting after meeting. Now that was going into sale. I don't think that's any different than any other company looking to be acquired from private equity to another one or privately to a PE firm.

00:43:45] Do you think customers will reach a point where they're upset with the focus on shipments or internal incentives for a company such as MacLean? Is there going to be a point where customers care about that and the cultural focus could negatively impact the business in the long term?

AG [00:44:09]: They would want to be able to do that, but I don't think the customers have the power to do that anymore because there's not as many suppliers. You got to get your parts, and that might be the only place you can get them at the time you're trying to build your project.

00:44:31] MacLean announced in early September 2026 that it's acquiring Delta Star, with the deal expected to close in Q4. What were your reactions to this acquisition, either positive or negative?

AG [00:44:47]: Mine is only negative because I follow what [Firm] is buying. It's hard for me to not think that they've got a monopoly where they've got manufacturing, then they bought a service business where you can put all these substations together and then you bought a utility. You can say prices are going up for whatever reason, then you can build everything and then you make it all the way back to the ratepayer and say, "Hey, we have to raise our prices because everything is so expensive," even though the only thing you didn't control is the raw material coming in. In my opinion, I don't particularly like that. However, it's not like private equity doesn't do good things. They put in capital where it can help, where a privately owned company doesn't either have the desire or the capital to do it on things that need to be done. I think it's a necessary thing. I think eventually, once you get this large CAPEX out of the way, the only other thing I think is you're not going to be able to sell it to another private equity firm because how would you make your profit off of that? I think eventually, you would have to dump this on IPO on the market you want to exit. Either that or you're going to do a long-term hold, which would be new, but I guess possible.

00:46:19] Thinking about Delta Star, PGC and other brands that MacLean has acquired since the backing from PE, how does this make it a stronger company? What can it offer to customers now that, in the longer term, will put it in a better earnings position to work down its relatively high leverage because of some of these acquisitions? We've touched on the ability to offer a turnkey solution. Do you think it can also shift manufacturing back and forth from facility to facility? Should we be expecting other synergies that would also be beneficial?

AG [00:47:03]: I can't imagine that they would be able to do that in a timely manner. Plus you're consolidating companies, which who knows how they're doing that? Is it all the power grid might have disappeared, but are these companies still operating independently, are they all using their own ERP systems? Have they collectively put together to press on their supply chain to get better pricing because now they've got larger intake. I don't know any of that. In terms of are they better leverage for customers? I would have to assume that they are or they wouldn't have been bought this way. It seems like a silly thing to overlook. In terms of Delta Star, I can't imagine that their capacity wasn't already full. To me, what would you be buying? You'd be buying an order book with highly profitable parts. Does that give you any leverage to bring more on in a timely manner? I'd be sceptical just because of where are you going to find people? If you haven't broken ground to build a new factory, you're years away from being able to expand that capacity.

00:48:30] We've touched on Hubbell. Especially as MacLean continues to acquire and grow its equipment lines, who would you class as the company's most direct like-for-like competitors? Is the company also consolidating to try to pursue this one-stop-shop goal?

AG [00:48:45]: There's one called… Oh, gosh, what is it, TE something. It's a Chinese company… TE Connect or something. I can't think of another direct competitor with… It's almost overnight, you bought up enough stuff to create another Walmart to compete against Walmart. They offer a ton of different things. TE Connectivity offers a lot of different things. If they wanted to do something, I think they could. I don't know how much backing they have, but they've got a really large portfolio. That could be something that they could possibly get into. Other than that, I really can't think of a direct competitor that would be big enough to buy up all the other ones that are left. Every time you go to a show, you'll see private equity there trying to find different companies that they could purchase up. It's still occurring now.

00:50:32] Are there any specific benchmarks that you'd expect MacLean or PGC to hit in 2026-27 in terms of sales and margin compared to what we saw in 2024-25? How should we understand the growth trends that the business will experience and how that will flow to the bottom line? You mentioned expecting around 8% sales growth for the overall market. How does that impact the margin? Would you expect to see margin grow commensurately? Could we even see margin compression over the next 2-3 years because of lead times, continued consolidation and competition heating up in the sector?

AG [00:51:20]: You might see some compression, but I can't imagine that they would be trying to target somewhere between a minimum of 30% and probably a target of 40%-something EBITDA. At least on what I'm familiar with.

RK [00:51:42]: That's doable.

AG [00:51:44]: Yes. That's doable, but that's only doable because of the last few years where they could raise prices to these extremes, whereas historically, they couldn't do that and you were fighting over a lot of times, if you were going to raise your prices, you had to speak with the end utility customer and then agree on what raw material index you would use to say, "Hey, 80% of my widget is made up of copper and copper has gone up X percent on this market here." We need to go up this percentage, and then it would track with that agreed-upon pricing level and it'd go up and down accordingly. That doesn't leave you much margin to move around historically. Now with all the tariffs and everything that went and if you can imagine, you've got utilities and stuff were using distributors for a long time.

That means they got rid of their in-house people that were doing purchasing who… You no longer have direct relationships that are really rich with folks. You end up getting a rapid fire of multiple manufacturers at one time sending in all of these pricing increases. It's hard to divide your time and you don't have very many resources to hunt them up and figure out what's true, what's not. If everybody is sending in all of these price increases, there must be something true to the market. I think that there's been a lot of wiggle room in that fact to do it.

00:53:30] Do you have any contrarian opinions on the demand outlook for electrical equipment OEMs over the next 2-3 years or in the near term as supply chains are strained? Is there anything that analysts or investors might be overlooking or missing?

AG [00:53:46]: No, I don't. What I see is, is you have data centres that are wanting to come on so bad, they're now having to bring their own power or bring their own substation because utilities can't get them fast enough or utilities typically aren't building and buying generation. For the ratepayer, even if data centres all went bust, these ones that are coming in are bringing their own generation. You're going to have tons of generators that normally wouldn't be bought because that capital would never be put on to the utility market because you wouldn't be using it for your legacy load. All of this is brand-new load and they're bringing their own generators at the moment because they can't get it fast enough on the utility side. Even if everything went bust, you would have all of this generation sitting there in a more robust market. Those would likely be repurposed to participate on the grid. Currently, you'll end up with more demand just from that aspect of it because the queues are so long, there's so many people that want to get on and utilities can't move that fast. I think you're going to have demand for more than what we've ever had demand for.

RK [00:55:03]: I think that's a good place to conclude the Interview. Thank you for your input and insight, and thank you for joining Third Bridge's Interview today. It's been a pleasure.

AG [00:55:15]: All right. Thanks. Have a good one.

RK [00:55:17]: You too. Bye-bye.

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