Anixter to Acquire Distribution Dynamics

Jason Sandefur

Anixter International announced plans to buy fastener distributor Distribution Dynamics 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 for Chapter 11 bankruptcy protection. If approved, the deal is expected to close in late June.
Eden Prairie, MN-based DDI has 227 employees and 20 North American locations. The company reported $76 million in sales for the fiscal year ended September 30, 2003.
“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,” stated DDI CEO Dominic Polimeni.
Polimeni reported DDI will continue to operate during the transition.
Anixter entered the fastener business by acquiring Pentacon Inc. out of bankruptcy in 2002. Anixter expanded its fastener capacity in early 2004 by purchasing UK-based Walters Hexagon.
The DDI sale agreement excludes operations in Kansas City, which Anixter acquired under a separate agreement of purchase, and DDI operations located in Portland and Medford, OR.
Anixter said it plans to offer employment to DDI workers at facilities it will continue to operate.
“We have committed significant financial resources to building a fastener-focused OEM supply business over the past couple of years,” noted Anixter CEO Robert Grubbs.
Prior to the pending acquisition of DDI, Glenview, IL-based Anixter generated approximately $300 million in revenue per year from the sale of fasteners and other small components to OEMs in the U.S. and UK.
“We believe the acquisition of the operations of DDI will expand our geographic coverage in the U.S. market and make us an even more attractive supplier to multilocation OEMs who are looking to improve supply chain efficiency,” Grubbs continued.
Grubbs said Anixter would convert DDI locations to the same business systems employed by Anixter Pentacon to provide product consistency.� 2004 FastenerNews.com