Acquisitions Restarting – Border States, Sonepar

Distributor acquisitions. We got accustomed to them from 2021-2025 with over 125 electrical distributors acquired. Last year was a quiet year, ending with Inline acquiring three branch Knoxville-based Customer Service Electric Supply.

It seems that the industry’s acquisition engine is starting up.

Border States Acquires Wedco

Last month, Wedco, based in Reno, NV, was acquired by Border States. Wedco has four locations and 73 employees. With some of the national chains actively seeking to grow through acquisition, the sense is that common culture, driven by an ESOP environment, attracted Wedco to Border States.

Sonepar’s Echo Electric Acquires Shaw Supply

The latest acquisition, according to reps in the local marketplace and an email shared by Sonepar to its manufacturers, announced that Sonepar’s Echo Electric is entering the Kansas City market through the acquisition of third generation Shaw Supply.

The announcement letter stated:

Note sent to suppliers announcing Sonepar’s Echo Electric’s acquisition of Shaw Supply based in Kansas City

According to local sources, Shaw is about a $20-25 million contractor-oriented distributor that is about 80% focused on the commercial construction business and the remainder serving the residential market.

Given Echo’s stated goal of serving the Midwest via a single platform, it would not be surprising to see Echo seek to “roll-up” smaller distributors as ways to enter Midwest markets and other secondary and tertiary markets where there are not major independent distributors.

It is also our understanding, through other sources, that Sonepar has another deal pending with a distributor that is in the $100-200 million range.

Restarting the Acquisition Market

What could restart the acquisition market? Elements include:

1. Generational succession. Without next generation in the business, the options become limited and an exit to a third party is most likely.
2. Technology / AI – Concern about technology, especially AI, and the “unknown” relating to investment and skill set. However, with AI becoming more affordable and the plethora of purpose-built AI tools, this could be less of a concern if companies want to continue to be independent. Our eBook, The AI-Enabled Distributors, which is available for only $39,) highlights some of these companies and how to compete in an AI world. Additionally, we’ve spoken with companies that are seeking to serve distributors <$25M (and if you are interested, reach out for some names.)
3. Market concerns. The electrical economy in many markets is “challenged”, especially if you are not playing in the data center market.
   • This may be one of the reasons why Sonepar was attracted to Shaw. The data center activity in this market is active. Plus, there is much construction, inclusive of major projects, in KC and Shaw could provide Echo a platform to invest in (accelerate hiring.)

Yes, all of the national players are “in the game” as we understand that multiple / three were bidding on some of these deals. Funding for large companies is “easy” as it is funded through cash flow (with some reportedly commenting that it is utilization of rebate income … unconfirmed.) And then, last night, I was asked about “the future of independents … how long for there to remain many.”

Comment below on how many electrical distributor acquisitions you think will happen this year. I’ll start the bidding at 20.