3 More Distributor Deals

Distributor consolidation continues and may be ramping up to close the year strong with three more electrical distributors announcing deals.

In the past week there were three deals announced.

Sonepar (Viking) acquires Sunrise Electric

The largest was Sonepar’s Viking Electric operating company acquiring Chicago-based Sunrise Electric.

According to Electrical Wholesaling, Sunrise was ranked #78 on last year’s EW Top 150, reporting revenue of $138 million.

Coupled with Sonepar’s Brook Electrical, which was acquired by Sonepar in April 2000, Platinum Electrical Supply, which was acquired, and operated, by Brook in November 2014, and now Sunrise, the combined entity has gained significant share in the Chicagoland market. The overall business will be branded as Viking Electric (Brook took on the Viking name in 2020.)

The Sunrise acquisition is Sonepar’s fourth so far this year and will help Viking on its quest to become a $1 billion operating company.

Eckart acquires Automated Controls and Electrical Supply

Last week Corydon, Indiana-based Eckart Supply announced its second acquisition of the year, acquiring Automated Controls and Electrical Supply, a single location primarily automation distributor. ACES was founded in 2004

In 2022 Eckart reported sales of $199.7 million and was ranked #62 on last year’s EW Top 150. With it’s ESU acquisition plus this deal, and growth, revenues would exceed $225 million.

Wiseway acquires Stearns Supply

And while not an electrical acquisition, Wiseway Supply acquired Stearns Supply, a single location plumbing distributor based in North Vernon, Indiana. This is Wiseway’s first branch in Indiana. While not electrical, it would not be a surprise to see the location become a dual offering location (plumbing and electrical), enabling the company to broaden its appeal in the surrounding community and leverage the physical infrastructure.

Wiseway now has 11 branch locations.

Stearns Supply also has an intriguing url as they also go by the name Plumbing Mall with a url of www.plumbingmall.com. The url could have value as a marketplace name or possibly nomenclature for a national entity / network.

Takeaways

• With two of these deals being electrical distribution deals, this brings the count to 23 so far this year.
• Recently I reviewed last year’s EW Top 150 and “marked off” companies that were acquired in 2022 and so far, this year. I further eliminated companies that many do not consider electrical distributors (i.e., utility distributors, MRO distributors, etc.) and removed companies that are master distributors (and hence considered by the industry as manufacturers. It brought the list down to about 100 distributors. If you’d like a copy, email me.
• The acquisition of ACES (and Stearns) coupled with Green Mountain’s recent acquisition and Schaedler Yesco’s purchase of Clarion Electric indicates that smaller distributors are “ringing the bell.” Whether it is due to generational change or recognizing that “times are becoming tougher”, small distributors are finding an “out”.
• The ACES (automation) and Stearns (plumbing) acquisitions highlight that distributors may seek complementary business. This further got me thinking about the Electrical Wholesaling’s Electrical Pyramid which highlights the types of distributors that sell electrical products. While full-line electrical distributors account for the majority of electrical component sales, with the market consolidating, there are still many niche companies that sell electrical materials that manufacturers serve. Given that NAED has presumably suffered a declining membership due to consolidation, perhaps expansion to other distributors who sell electrical material, may represent an opportunity. Perhaps the training programs would have some appeal, maybe meeting with electrical manufacturers?
• A posting from John Gunderson, a channel strategy and profitability consultant at the Dorn Group, shared a LinkedIn posting yesterday sharing a story from a newspaper publisher from 25 years ago which relates to the distribution challenges of today. The publisher felt newspapers would survive and didn’t think of his value as “providing information.” Distributors may be at a similar tipping point, as could be associations. Check out his posting.

Will we get to 30 distributor deals this year and make it three years in a row?