A Closer Look at Mergers and Acquisitions with Dan Drazilov, Sonepar Canada

November 21, 2024

By Owen Hurst

Recently Canadian Electrical Wholesaler had the opportunity to sit down with Dan Drazilov, Vice President of Mergers & Acquisitions and Business Development, at Sonepar Canada to discuss his focus on Sonepar growth through mergers and acquisitions (M&A).

Dan is well placed in Canada to lead this charge with an extensive history in the electrical market having worked with a previous a major distributor and many independents. His unique perspective of the market allows him to look at the value of M&As from multiple perspectives with a goal to grow Sonepar, the business being acquired and the market.

Sonepar has long focused on growth through M&A, with upwards of 60% of their global growth over the last 20 years coming from acquisitions. In 2024 alone Sonepar acquired 13 companies globally, including Electrozad and Robertson in Canada.

1. What differentiates Sonepar’s acquisition strategy and your role?

Traditionally M&A has largely been approached from the finance and legal perspective.  However, Sonepar has been in the M&A game for some time and has very strong financial and legal teams in place. To continue their M&A growth Sonepar needed someone with good industry experience and deep market connections that were critical to lead the next generation of Sonepar M&A’s because at the end of the day, you certainly need strong finance people, but you can’t get the deals if you don’t have the relationships and don’t understand the markets. Sonepar is not just looking to buy any company, they’re looking for very specific companies that fit their culture and are themselves successful and have a good business culture.

To be a mutually beneficial acquisition, we look for a unique culture and a company that plays in a market that has continued to excel and grow. We look a lot at that because sometimes you’ll see an independent that has one location for 20 years or more. The sales have grown with the market for 20 years and they’re quite content and happy with that. That would not be a good fit for us. We’re looking for a business that is inspired to grow, to get stronger. To, you know, take market share from their competitors and continually drive their business forward.

Above and beyond the company we are looking at, it’s about understanding the entire Sonepar ecosystem and the Canadian market as a whole and finding the right fit for the business in the market. At times Sonepar has been approached by a company that is doing great and is successful, but Sonepar may already have a foothold in that market, so it doesn’t make sense. Therefore, a first step is looking where Sonepar has gaps or could be doing better within a business sector or geography.

2. Why is acquisition a priority for Sonepar?

There is a multitude reasons why Sonepar has a focus on acquisitions as part of its Canadian and International strategy. Access to new vendors, customers and new vertical markets and product categories. Strategic acquisitions give us an opportunity to increase our sales growth, scale and overall volume as well as adding new talent to our organization. There are significant advantages for both Sonepar and the acquired company.

3. What does Sonepar Bring to acquired companies?

So, our new President, George said it best in our town hall meetings with the Electrozad staff. The first thing he said after he introduced himself, because, as you know, he has a lot of nervous people saying, oh boy, what’s going to happen? We were just acquired, he said, look, I just want you to know there’s no template or playbook. We don’t have a list of what we’re going to come in and change. We’re going to assess everything and we’re going to work with you. We’re going to find out exactly where we can help. Where can we provide more value, make you better, make you stronger.

Overall, our goal is to take them to another level and give them almost like a menu of the various elements and areas where we can help them grow, whether it be back office, finance, HR, legal or front-end digital tools. The focus is on supporting the company and staff. And regarding staff, the goal is minimal impact on their jobs and lives aside from additional support. 

Many of our most recently acquired companies wanted to rapidly implement the Sonepar range of digital tools. Teams at Electrozad and Aztec were immediately interested in the digital options. Also having such a large company behind them means IT teams now have another resource and an entire team to support them. This alone can bring a big sense of relief and immediate advancement.  

Sonepar’s brand and network also provides more options for salespeople to grow within each of these businesses. There’s nothing better than an independent salesperson who can now go to their customer and say, hey, we have some great news. We’ve been acquired by Sonepar, and the customer goes ohh God, what does that mean? And the salesperson says, well, we can continue to provide you with all the great service we’ve been providing you for the last X number of years but now we can add to that, we can get your product faster, and we can give you products we didn’t have before. 

Admittedly although things happen fast it does take time for Sonepar to learn and assess further and to ensure that tools and directions are right for Sonepar, and the new acquisition and resources are rolled out in a manner that benefits growth and understanding without forcing immediate change. 

4. Now that Robertson is officially closed, can we discuss why Robertson, what makes this acquisition such a great fit for Sonepar in Canada?

We could not be more thrilled to have Robertson join Sonepar. Robertson is a phenomenal organization with more than a 70-year history in the Canadian electrical marketplace. As a national distributor with 20 branches and over 400 associates, this acquisition significantly expands Sonepar’s national presence, particularly in Ontario, Canada’s largest market. This acquisition also signifies Sonepar’s entry into the fast-growing utility market. This is a crucial acquisition for us, but importantly, we feel that Sonepar will compliment Robertson’s existing model, fostering growth and development through our world-class digital capabilities, supplier relationships, and national support teams in IT, finance, human resources, legal, vendor relations, and sustainability.

5. What is that excites you about M&A?

What I love about acquisitions is that they give us a new prospective on how other companies have grown and become successful. Every time we add a new company, we learn new things and create opportunities to become stronger together.

6. Was there an experience that peaked you interest in M&A?

My first opportunity to be involved in acquisition really opened my eyes to all the planning, risk assessment and work required to complete a deal. I found it to be very rewarding especially seeing years after the deal how the company accelerated their business to a new level of success. What is also fun about M&A is that you work with every function in the business and really get to understand what the business does well and where they can use support. Bringing a new company to Sonepar is very important and it’s what’s made us successful when it’s done right.

The process of M&A is a very complex one that requires a wide range of skills and above all else the ability to understand the markets Sonepar serves, the players and how all the pieces and various elements of the market fit together, whether that be independents or corporations.

As Dan explained, ultimately the goal remains the same; to grow Sonepar and the entire electrical market through strategic positioning and expanding resources. The focus is on making Sonepar and all acquired companies better in order to serve and grow the Canadian electrical market.

Learn more about Sonepar Canada at their website HERE.