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.
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
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.
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.
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
Current Liabilities: $78,268,000
Long Term Debt: $86,743,000
Shareholders' Equity: $166,370,000
Revenue (FY 98): $470,279,000
Net Income: $7,542,000
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:
- Strong management -- over 200 years combined experience -- they
know the distribution business
- This is a greatly undervalued company
- Enthusiastic, aggressive sales team
- Expanding into e-commerce
- Huge market potential... constantly growing technologies produce
- ANIC sticks with the business it knows... distribution
- Under-leveraged... strong financial position for growth
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
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