Sonepar USA President on Unique Approach to M&A

• Sonepar USA, fresh off its market-shifting acquisition of Springfield Electric, has a specific profile of the type of company it looks to acquire in its approach to M&A.
• Despite its status as one of the largest distributors in the world, Sonepar USA strives to maintain the local ownership and a small-company vibe of its newly added assets.
• Sonepar USA President Rob Taylor opens the company’s M&A playbook, sharing insights about the businesses Sonepar targets to its integration process.

On paper, it’s easy to gawk at Sonepar’s numbers. The France-based electrical giant employs 48,000 people and generates $27 billion in revenue. It serves 1 million customers through 145 operating companies, 3,000 branches and 115 distribution centers in 48 countries.

In 2020, Sonepar USA — the Charleston, S.C.-based subsidiary of privately held Sonepar Group — posted revenue of $10.8 billion, good enough for No. 2 on MDM’s Top Distributors list for Electrical, Data & Security.

Those already gaudy numbers are growing through both organic growth and acquisition, but for Rob Taylor, president of Sonepar USA, the company is about much more than a top-line figure, a branch footprint, an employee count. Even as it scales up, Sonepar strives to maintain a family-owned culture. That’s especially true, he says, whenever the company adds a new business to its portfolio.

Following the company’s recent acquisition of Springfield Electric Supply Co., Springfield, Illinois — announced on July 22 and closed on Aug. 31 — MDM checked in with Taylor to see how Sonepar upholds the ideal of keeping a “local feel” with its newly acquired businesses. In this latest MDM executive interview, we spoke with Taylor about Sonepar’s M&A strategy, the role of culture in acquisitions, the integration process and what’s next for Sonepar.

MDM: As Sonepar USA expands its national network, how does the company keep a “local feel” with newly acquired businesses?

Taylor: Sonepar is a family-owned company that looks to acquire like-minded local and regional family and employee-owned companies. We focus on leveraging companies’ go-to-market approaches and look to invest to enhance logistic capabilities and opportunities for customers and associates. We understand how important the local relationships are and how important the local associate is in continuing to provide customers the excellent services they expect.

After closing an acquisition, we engage in a very collaborative process, taking the time to learn and fully understand the acquired company’s culture, priorities and business. Ultimately, understanding how to leverage Sonepar’s size, scale and investment capabilities to further enhance the business and, at the same time, keep the local customer relationships, touch and culture.

MDM: What role does cultural alignment play here? Do you only pursue deals where the sellers’ leadership/ownership teams have a similar goal?

Taylor: Finding a good cultural fit is critical for a successful acquisition. We do our homework, have open and honest conversations with the prospective company, and pursue those deals where shared values and business goals exist.

Most importantly, Sonepar looks for those companies that put the associates first and understand that the associates are the most important component of success. In many instances, this starts with the leadership team. We look for strong leaders that are excited about the growth opportunities and expertise Sonepar can bring to the business.

What are some specific integration areas where acquired companies benefit most from Sonepar’s resources?

Taylor: Our mission is to minimize disruption and keep the business focused on what they do best, taking care of their customers. Our approach is to work closely with local leadership and introduce the teams to the capabilities Sonepar can bring to enhance the current business and expand service offerings. This includes digital and logistics expertise and investment and HR, IT, finance, legal and marketing resources.

We have exceptionally strong shared services offerings that exist to enhance our operations and sales teams – the goal is to make it easier for a company to focus on its customers and associates. Also, through our network of operating companies, there are significant opportunities to share best practices.

MDM: What makes Sonepar unique in your approach to M&A?

Taylor: Our goal is always to expand upon and grow a target’s capabilities to service its customers. Our approach is always centered around what the target does well and what we can do to help enhance the solid foundation. In addition, we have a proven track record of conducting fair, confidential and efficient acquisition processes in a manner that does not disrupt associates or the business. We understand how sensitive the process is and our approach has been developed over many years acquiring and successfully integrating local family-owned companies.

Further, not only do we look to grow with the culture of that company, but we also look to learn from its best practices and introduce the companies’ associates to many other opportunities that exist across our Sonepar USA network. We always recommend prospective companies discuss our approach with previously acquired company leaders to ask questions and be comfortable with our acquisition and integration process.

MDM: Do you plan to continue growing through additional acquisitions?

Taylor: We are very focused on both organic growth and growth through acquisitions. We fully expect to be actively involved in acquisition opportunities, and right now, we continue to talk to potential targets, looking for strong local and regional companies that have the right cultural fit – focused on customers and the associates. When that exists, we believe Sonepar is the right acquisition partner.

MDM: As far as your approach to M&A, is consolidation good for the electrical sector, and if so, in what ways? What impact is it having on both the channel and its customers?

Taylor: The industry is still in the early stages of consolidation, and we feel certain consolidation is healthy, but only with a good strategy and integration process. The ultimate goal of an acquisition should be to improve the level of services and capabilities for the customer. That can only exist if the acquisition is well planned, and all parties are aligned on the right priorities and integration processes. When we do acquire, we look to help that company build offerings, solutions, logistics and digital capabilities and services, and connect geographies and expertise. We see this as beneficial for our current and future customers and associates.

MDM: As Sonepar USA President, where do you see the company go from here?

Taylor: Not only will we continue to focus on acquisitions, but we continue to make unprecedented supply chain investments across the U.S., enabling us to service our customers at the very highest levels and be the go-to distribution partner. For instance, we are in the process of opening a new state-of-the-art automated central distribution facility at Cooper Electric, and making similar investments at Crawford, North Coast and Capital. We continue to enhance and roll out new digital services for customers to maximize the customer experience and efficiencies.

We have fully surveyed and listened to our associates and are making changes to improve the working experience, provide more opportunities for our associates and better support our critical diversity, inclusion and equity initiatives. Ultimately, we want to be the employer of choice. And as we look to invest and improve in these areas, we remain focused on initiatives that will help support our local communities and sustain our environment. It is a lot, but change takes effort and the Sonepar USA associates are up for the task. I am very excited about the direction we are going and the future of Sonepar.