'Transformation' Powering Anixter in 2016 - Modern Distribution Management

‘Transformation’ Powering Anixter in 2016

Acquisitions help company set course for record-breaking year.
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Anixter International Inc. is enjoying the benefits of some recent strategic moves that helped the company post record third-quarter sales and has positioned it for further top- and bottom-line growth, according to CEO Bob Eck, who spoke at the Baird Global Industrial Conference in Chicago, IL, earlier this month.

In May 2015, Anixter sold its OEM fasteners division for $380 million in order to "exit a business that was a very inflexible operating model and our lowest return-on-capital business," Eck said.

Another strategic decision – one that placed "more focus on security" – was Anixter's $420 million purchase of Tri-Ed.

But its splashiest move came last summer when the company paid $825 million for the Power Solutions division of HD Supply. Eck called the purchase of Power Solutions a "critical acquisition for us because we had a utility business that was in decline based on too narrow of a product offering, so not enough relevance to the customer."

"By acquiring the Power Solutions business," he said, "we took what was a $200 million utility subset of our legacy wire and cable business and built it into what is effectively the largest distributor in the utility space in North America."

In the third quarter, the company had a $533.5 million favorable impact from the acquisition of Power Solutions, which has helped Anixter bolster its low-voltage, transformer and switchgear product offering to gain traction in mid-size construction projects.

This new breadth of product – part of what Eck called a "transformation" for Anixter – helped the company win a five-year, $750 million contract serving one of the largest investor of utilities in the country.

"That's a program that neither one of the two entities would have been able to win on their own but the combination of the two was what drove the win," Eck said.

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