NEW YORK - Trilantic North America, a private equity firm, has announced the merger of Solomon Corporation, a provider of maintenance and repair services for electrical transformers, with Sunbelt Transformer.

The combined entity will address a critical segment of the electrical power equipment and services market, serving the transformer and related needs of commercial, industrial and electric utilities customers throughout North America, reports BusinessWire.

You can tell the market for new and/or refurbished transformers is heating up when mergers like this one with Solomon and Sunbelt are supported by private equity investment. Why? Because capital follows opportunity and this merger tightens up an already tight market for refurbishment or remediation of existing assets. It makes great sense from the supply side of the equation to bring these two recognized companies together. It might not make as much sense from the demand side though as two suppliers become one.

Is it good for the industry? Most probably yes, because it does allow the combined company to consolidate their resources into the three main segments of repair/rewind, new and materials recovery or decommissioning. Each of these segments are all slated to continue growing as the demand for transformers also continues to grow and the demand for materials recovery grows. It does suggest that the procurement market needs to become more strategic and better planners in order to meet their needs.

And for the new company, consolidation will offer cost savings opportunities and the ability to focus better on serving the market. Good for them.