Sonepar Acquires Echo Electric Supply, Enters Mid-America

The M&A people at Sonepar, and the M&A people at a number of advisory services supporting electrical distributor continue to be busy.

Yesterday Sonepar announced that it acquired Echo Electric Supply.

While many may not be familiar with the company, the company has 23 branch locations throughout five states (Iowa, Nebraska, Minnesota, South Dakota and Missouri.

The company is a “quiet” company but a significant company, ranking number 28 on Electrical Wholesaling’s latest top 100 electrical distributor list. While they didn’t share revenue with EW, they were slotted in the mid $400 million range with about 500 employees.

The company grew significantly over the years. I recall meeting John Franken, who was an owner way back in the mid to late 90’s. Echo was one of the farthest east members of WIED (Western Independent Electrical Distributors) which merged with TIED (The Independent Electrical Distributor Group), which eventually formed IMARK.

If I recall correctly, the company had a small Rockwell APR in the Sioux Center, IA area. They then made an acquisition down in Council Bluffs, which if memory serves correct, was a contractor house. And from there it grew.

Sonepar Acquires Echo Supply

According to the press release:

“Sonepar announced Wednesday that it has entered into an agreement to acquire Echo Electric Supply Company.

Family-owned and operated since 1950, Echo Electric supplies electrical parts, equipment and services to contractors in the industrial, commercial and residential markets and ranked in the top 30 of Electrical Wholesaling’s 2024 list of the largest electrical distributors in North America. Operating in Iowa, Nebraska, Minnesota, South Dakota and Missouri, Echo Electric will join Sonepar with 23 branch locations and more than 600 associates.

Headquartered in Council Bluffs, Iowa, Echo Electric will be Sonepar’s seventh acquisition in the Midwest in the last three years. It will be joining companies like Springfield Electric, Richards Electric, Pepco, Holt, Sunrise Electric and, most recently, Michigan-based Standard and Madison.

Rob Taylor, President of Sonepar Americas, said of the acquisition: “We welcome Echo Electric associates into Sonepar and look forward to building upon their reputation as the market leader. Echo Electric is an exceptional distributor with excellent technical expertise, particularly in power distribution and wire management to support state-of-the-art data centers. They have an impressive track record of growth, and we’re excited to continue our expansion across the Midwest together.”

Mitch Lane, CEO of Echo Electric, commented: “I’m enormously proud of Echo Electric’s track record as an independent distributor. Sonepar’s approach of combining global resources with a local strategy tailored to the market was important in our decision to join their well-respected organization. We feel Sonepar is a great cultural and strategic fit. I’m deeply appreciative of our employees’ hard work and dedication over the years and look forward to this new chapter for us.”

The acquisition is scheduled to close by the end of August, subject to regulatory approval.”

Observations

1. Congratulations to the Echo Group team and to Sonepar.
2. It’s interesting that the last couple of Sonepar acquisitions have not been integrated into one of their platform companies. The closest for Echo are Viking Electric and Springfield Electric. Could Echo become part of either of these longer-term or could it be its own “MId-America” platform. When you look at where Echo’s locations are, they are MId-America. The territory could abut Springfield’s markets or, given the size of the company and Sonepar’s desire for its operating companies to be $1 billion businesses, perhaps they become a mid-America play and expand more into Nebraska, Kansas and compete with Border States and DSG in the Dakotas?
3. In looking at the locations and “branch names”, it infers that Echo may have done a roll-up of small distributors, optimized operations, and then grew the business. If this is so, it could become a model for Sonepar to build out its model in the great Midwest.
4. While the dollar value of the business makes it a perfect target for Sonepar, it’s a little bit of a departure from the acquisitions that they have made. Echo is not in any major markets (apologies to Des Moines, where I once lived, Omaha and Lincoln, NE.) If the company is seeking to “win” in small-town America, which is also where a number of industrial companies are located as well as where data centers are being developed, this could be a very prescient.

So, who’s next on the chess board?