7 Deals in North America, 5 in the US … So Far … Sonepar

While seemingly the acquisition market has quieted the last couple of months, this year has been an active one for Sonepar North America with seven (7) deals so far exceeding $2 billion in revenues, according to a recent press release:

“2024 has been a transformative year for Sonepar as it continues to focus on strategic growth. Since 2021, Sonepar has closed 21 acquisitions in North America. The acquisition growth alone in 2024 consists of seven companies representing over $2B in additional revenue, approximately 1,700 new associates, and 89 new branches. Sonepar’s North American acquisition strategy is key to the global success of the Sonepar Group.

Sonepar’s mission is to continue as the strongest and most dynamic electrical distribution network across the entirety of North America. It seeks to combine local sales excellence with significant regional and global investments and capabilities to provide customers with the best distribution experience and associates with the most opportunities to succeed.

Philippe Delpech, President & CEO of Sonepar, commented:

“North America is our largest market, where Sonepar leads in building and industrial verticals serving customers with a best-in-class level of service. With 36 billion dollars in sales in 2023, Sonepar is the world leader in B2B electrical distribution of products and services, deploying a global automated supply chain and a proprietary omnichannel digital platform called Spark. Today, the USA is leading in size, processes, technology, and workforce quality. We welcome the more than 1,700 associates who joined the Sonepar family through these seven acquisitions and are already working on combining our strengths for the benefit of customers, suppliers and associates.”

Rob Taylor, President of Sonepar Americas, said:

Jason Locklair, VP General Counsel US Transactions, Americas M&A Strategic Advisor; Kris Prebola, VP Mergers & Acquisitions (SVP Finance Americas effective Jan. 1, 2025); Peter Bruhn, SVP General Counsel & Strategic Development, Americas; Conor Elliot, M&A and Strategic Development Manager, Sonepar USA.

“Each acquisition is carefully considered, and we look to partner with the best local and regional distributors, which share our values and desire to grow. We truly believe that acquisitions are a strategic partnership that benefits all parties. We work closely with the leadership of companies we engage with to understand what makes them a success, with the goal of enhancing the local go-to-market approach and culture with significant investment and new capabilities. This strategy will continue to be an important focus for Sonepar across the Americas.

The statistics regarding Sonepar’s investments in North America are striking. Sonepar has added numerous automated distribution centers and significantly increased its density branch network, now serving every province, territory and state in North America out of 548 total branches. It has also added new service offerings like panel shop design and assembly capabilities and expanded expertise and product offerings in the solar and EV, industrial, broadband and utility segments. Sonepar’s digital solutions such as Spark and the Digital Job Center are best-in-class, offering customers a seamless digital experience.

Sonepar will continue to grow organically and through acquisitions and make significant investments across its entire business. The goal is to remain the distributor of choice for all customers across the Americas.”

Within the US, these acquisitions have been:

• Summit Electric (NM)
• Echo Electric Supply (IA)
• Madison Electric (MI)
• Standard Electric (MI)
• Electric Supply Center (MA)

All are good size companies, with the smallest being about $175 million. Three (since the Madison and Standard deals were a bundle (as I hear the State Farm jingle in my head) enabled Sonepar to move into new geographic markets.

Take Aways

The question then becomes, what / where’s next?

Digital

First, if you haven’t watched the video on Sonepar’s Digital Job Center, you should. Larger contractors are expecting, and asking for, these types of online services. It will migrate down to large regional contractors. Progressive mid-size will get there. Many eCommerce companies will be challenged to deliver these services, so distributors need to consider their response / playbook. Further, consider the integration with suppliers to access the information. It isn’t with everyone, but it is going to be with everyone that matters to Sonepar … and no, they will not see a need for an industry portal … why give up something that they perceive is a competitive difference?

Acquisitions

What geographic markets does Sonepar need to pursue? Which companies are large enough to give them a beachhead into a new market or will they pursue “tuck-ins” to help them leverage their investment in their RDCs (which provides significant synergies when they make an acquisition … and acquisition targets may consider if price is the only consideration for an owner’s exit.)

Or, in some markets, will they consider expanding their offerings?

It will be interesting to see Sonepar’s reported revenues in the next Electrical Wholesaling / MDM Top electrical distributor list. Take the 203 sales (reported in the current list), add $2 billion for acquisitions, and then look at the delta … should approximate organic growth (and yes, there may be some new branch openings buried in the data.)

Congratulations to Sonepar and to those owners that achieved a successful exit. It will be interesting to see how the year closes … any predictions?

How many more this year? Any more for Sonepar?