Global Fastener News

Anixter Pentacon to Acquire Distribution Dynamics

John Wolz

Distribution Dynamics Inc., a privately held distributor of fasteners and small components to OEMs announced will sell its assets and operations to Anixter International Inc. for $25 million.
The proposed sale is subject to approval by the U.S. Bankruptcy Court for the District of Minnesota where DDI filed Chapter 11 petition. The proposed sale is subject to higher offers and approval by the Bankruptcy Court, and is expected to close in late June.
Anixter entered the fastener distribution business by acquiring Pentacon Inc. out of bankruptcy in 2002.
In connection with this proposed purchase, Anixter plans to assume certain obligations of DDI under the facility and operating leases that are used in conjunction with the operations that Anixter is proposing to purchase and Anixter plans to make offers of employment to the employees in such operations.
Commenting on the Chapter 11 bankruptcy filing and the proposed acquisition, DDI”s CEO Dominic Polimeni said that the “financial challenges of the past few years have accumulated to the point where it is now in the best interest of our customers, employees and suppliers to seek a fresh start.” Polimeni described Anixter as ” a strong company that has all the resources, both financially and operationally, to ensure the continued quality service and uninterrupted supply of product to our customers” and “excellent career opportunities for our employees. ”
“Anixter’s willingness to purchase certain claims at a level in excess of what is likely to be recovered from the bankruptcy process is an excellent opportunity for key product suppliers to minimize their financial losses in this situation,” commented Polimeni.
Anixter CEO Robert Grubbs pointed out that prior to the pending DDI acquisition “we generated approximately $300 million in sales per year from the sale of fasteners and other small components to OEMs in the US and United Kingdom. We believe the acquisition of the operations of DDI will expand our geographic coverage in the US market and make us an even more attractive supplier to multi-location OEMs who are looking to improve supply chain efficiency.”
Anixter will convert DDI locations to Pentacon operations.
Eden Prairie, MN-based DDI is a privately held value-added distributor of fasteners, hardware and related products specializing in inventory logistics management programs for OEMs. DDI has 227 employees and 20 North American locations. DDI reported $76 million in sales for the fiscal year ended September 30, 2003.
Glenview, IL-based Anixter International distributes communication products, electrical and electronic wire & cable, fastener and other small parts (“C” Class inventory components) to OEMs. Anixter provides inventory management programs, more than 225,000 products and $500 million in inventory and has 151 warehouses totaling 4.5 million sq ft of space in 42 countries. Founded in 1957 and headquartered near Chicago, Anixter trades on The New York Stock Exchange under the symbol AXE. Anixter.com �2004 FastenerNews.com