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Organized in 1993, ANIC has grown from a $10 million company to a $470 million company through strong internal growth & a series of 16 major acquisitions... with more in the future. The goal is to become a multi-billion dollar company by acquisition as well as internal growth. Its 1998 acquisitions included four major companies: Yankee Electronics, Optical Fiber Components, Superior Wire & Cable, & Texcan Cables, Inc. It recognizes its area of expertise & has divested several non-strategic assets to focus on its core business & higher margin products groups. At the heart of ANIC's success is its management team with decades of industry experience & its sophisticated information technology system which integrates sales, inventory control & purchasing, warehouse management, financial control, & internal communications. It provides instantaneous updates on all phases of the business so that management can intercede the moment a problem occurs & take corrective action. This system, installed in late 1997 is Y2K compliant, is capable of handling future growth, & allows for the rapid integration of newly acquired businesses. It also facilitates the proper management of its extensive inventory, which isn't subject to meaningful product obsoles-cence due to the nature of its products. Business ANIC is a "general store" for the wire & connectivity products that serve as the nuts & bolts of the Internet. These products serve the needs of transmitting communications, low voltage & power systems. Applications include voice, video, data, sound, security, fire, & energy management. Almost everything ANIC does in this modern era is somehow "connected:" the credit card, the ATM, home security, communications, etc. There is a wire or connector of some type involved with all these common devices... & technology keeps extending the list. Early in 1999, ANIC signed an exclusive agreement with NetWolves Corporation for its FoxBox, a multi-services Internet communica-tions gateway product that offers a cost-effective communications solution (it uses one device to simplify access to the Internet). ANIC has major vendor relationships with leading manu-facturers for marketing their telecommunications products including: Lucent Technologies, Belden Wire & Cable, Hubbell, Allied Telesyn, CDT, Datacom, AMP, Comm Scope, RadioLAN, Optical Cable Corp., etc. ANIC prides itself on maintaining excellent relations with its vendors as well as its customers. Market Analysts peg the growth rate of the wire & cable market at 17% a year, & the industry at between $50 & $100 billion. Drivers for this area of the industry include replacement of copper cable with fiber optics, the national information super-highway, & the growth of local & wide area networks. In the area of sound, security, alarms, & energy, the market is estimated at more than $5 billion, driven by increased concern about crime, more stringent building codes, etc. There are 1,000 small players in these markets, but ANIC is on an acquisition path which promises significant consolidation & a large piece of the pie. Although the company serves a wide range of customers, most of its sales are to local & regional installation companies (contrac-tors & systems integrators), versus large corporate clients that are more sensitive to price. ANIC's sales force of more than 550 has an average of 10 years experience & are a key to the company's growth. The sales force is relationship driven whereby ANIC, through personal connection, provides continuity of supply. |
80 percent of ANIC's customers are involved in rewiring of existing structures rather than new construction, so ANIC is not subject to the vagaries of the new construction business. Older facilities have to be rewired from time-to-time in order to respond to new technologies. In terms of geographic penetration, 95% of its business is in North America, avoiding foreign economic problems. Another risk reducer is the fact that no one customer or vendor represents more than 10% of ANIC's business. Management Alan B. Anixter, chairman & a co-founder, was CEO & chairman of Anixter Bros., an international specialist in the distribution of electrical wire, cable, & related products. He is also president of Alanburt, Inc., a management advisory firm. .... Scott C. Anixter is chairman, CEO, & director. .... Carl E. Putnam is president, COO, & director. He started his career at Belden Wire & Cable & was executive VP with 15 years of sales & management experience at Anixter Bros. .... Donald C. Welchko is VP, CFO, & director. He was formerly VP, corporate lending at Harris Bank, where one of his clients was Graybar, one of the largest wire & cable distributors. .... Robert L. Swanson is senior VP. He is a 25-year veteran of the industry. .... John P. Figurelli is executive VP. He has 20 years of experience in the industry. Financial Status (12/31/98) Current Assets: $213,331,000 Recommendation I recommend Anicom for both midterm & long-term appreciation. The highly experienced Anixter family has the formula for success as distribution specialists. It has more than 550 enthusiastic salespersons who are extremely aggressive & are fully capable of creating significant growth for the company. They are relationship, not price driven, which fosters continuing bonds between themselves & their customers. ANIC operates out of 75 warehouse/sales locations. It is doing everything right. This is a solid growth situation. Here are some other things I like:
Contact Call CFO Don Welchko @ 800-641-3980, fax 847-518-8777, or write 6133 N. River Rd., Suite 1000, Rosemont, IL 60018-5171. www.anicommm.com ...continued on next page, click here |
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