In the past two years alone, Sonepar or one of its subsidiaries has acquired eight large independent distributors, including most recently Echo Electric, Council Bluffs, IA; Electric Supply Center, Burlington, MA; as well as Madison Electric Co., Warren, Mich.; Standard Electric Co., Saginaw, Mich.; Electrozad, Windsor, Ontario; Billows Supply, Philadelphia; Sunrise Electric Supply, Addison, Ill.; and Electric Supply of Tampa, Tampa, Fla. Other national or regional distributors have been active buyers, including Rexel, which in 2023 or 2024 will buy Electrical Supplies Inc., Miami; Buckles-Smith, Santa Clara, Calif.; Teche Electric, Lafayette, Lafayette, La.; and Talley Inc., Los Angeles, a large VDV specialist.
Graybar Electric, Consolidated Electrical Distributors, and Border States Electric also acquired some major distributors. Graybar acquired Shepherd Electric Supply in Baltimore and Blazer Electric Supply in Colorado Springs, Colo.; CED bought Parrish-Hare Electrical Supply in Irving, Texas; and Border States Electric acquired Dominion Electric Supply in Arlington, Va., and Winston Engineering in West Hollywood, Calif.
You may or may not see much change in your local supply company if it is acquired by one of these larger distributors because these companies often try to keep local management and staff in place after the acquisition — and being part of a larger company can give smaller companies access to resources to grow the business that they didn’t have previously when they were privately owned. When one of these larger chains moves into town, they can provide some stiff competition to the independent companies that are still in the market, especially when it comes to pricing. In theory, these larger companies can negotiate more lucrative purchase discounts on the products they buy from electrical manufacturers, and then pass some of the savings on to customers. Many of the remaining independent electrical distributors combat this price competition by teaming up with other distributors in purchasing/marketing groups such as the recently merged Affiliated Distributors, Wayne, Pennsylvania, and the IMARK Group, Bowie, Maryland, to receive better prices from the electrical vendors in these groups.
Not all remaining independent distributors see the growth of larger distributors as an insurmountable obstacle. Some participants said smaller distributors are still able to respond more quickly to market opportunities and may have better access to local talent.
At Inline Electric Supply in Huntsville, Alabama, Bruce Summerville, president of the company, said, “We are one of the last remaining multi-location independent distributors in our part of the country. I think that fact, combined with being a fully employee-owned company, gives us an advantage in recruiting top-notch new players to our team. The larger players we compete with will likely put some pressure on our margins, but overall I am confident that we will be able to outperform them because we have better, more qualified people.”
Richard Booth, electrical division manager at Coburn Supply in Beaumont, Texas, says acquisitions sometimes give larger companies an advantage through their supplier relationships. “The big name companies come into the game with stronger supplier relationships than the independent regional companies in some cases,” he wrote in response. “This forces the smaller distributor into a corner that we have to fight for. Now suppliers who promised to work with you when you enter a new market are backing out of that deal when the larger national chain cannibalizes the competition.”
