Anixter’s Board Graded 4 ‘A’s’; ITW 1 A, 2 Bs and 1 C

Jason Sandefur

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Anixter International Inc. earned all “A”s” in Crain”s Chicago Business ratings of its region”s corporate boards.
Illinois Tools Works Inc. garnered an A for compensation, B”s for board composition and audit and a C for takeover defense.
WW Grainger scored an A for compensation; B”s for board comp and audit; and D for takeover defenses.
Lawson Products was graded A for audit; B for takeover defenses; and D for compensation.
Crain”s rated the boards based on data from the Institutional Shareholder Services, a corporate watchdog.
Anixter”s high ratings by corporate watchdogs were attributed to a majority of independent board members who are elected annually, a board-approved CEO succession plan; and “no poison pill policy to stop a friendly takeover.”
Anixter, with $4.94 billion in 2006 sales, is chaired by Sam Zell.
“Heavy hitter” board members include James Blyth of the London-based spirits maker Diageo PLC; and Matthew Zell, a managing director of Equity Group Investments and Sam Zell”s son. Other board members are: Linda Walker Bynoe, Robert Crandall, CEO Robert Grubbs Jr., Phillip Handy, Melvyn Klein, George Munoz, Stuart Sloan and Thomas Theobald.
Crain”s notes that wire & cable distributor Anixter was one of Sam Zell”s “grave dancer” acquisitions. Zell acquired Anixter for $510 million in 1986 and was merged with his logistics and transportation company, Itel Corp.
Anixter had been a public company since 1975.
Zell owns 14% of Anixter.
Anixter entered the fastener business by acquiring the near-bankrupt Pentacon in 2002 and has subsequently added numerous fastener companies in North America and Europe (see FIN Annual Review of Fastener Stocks, May 16, 2007)
Crain”s pointed out that ITW “added global expertise” to its board with McDonald”s Corp. CEO James Skinner and retired PepsiCo vice chair Robert Morrison.
“That comes in handy as ITW, which has been on a decade-long acquisition tear, plans to buy more inter-
national companies,” Crain”s noted.
Don Davis, retired Rockwell Automation chair, “brings knowledge of the auto-parts industry, one of ITW”s biggest business lines.”
In 2006 44% of ITW”s sales came from overseas and the company estimates that will rise to half for 2007.
ITW s $14.06 billion in 2006 revenue comes from about 750 businesses that manufacture specialty parts for everything from construction equipment to industrial packaging and food processing.
Half of the directors have been on the board less than a decade, “which corporate governance experts say helps bring fresh perspective.”
Board member Harold Smith was ITW president from 1972 to 1981 and is the great-grandson of founder Byron Smith.
ITW”s other board members are: William Aldinger, Michael Birck, Marvin Brailsford, Susan Crown and Robert McCormack.
“On Wall Street, ITW continues to please investors by posting average annual earnings growth of 19% over the last decade,” Crain”s found. “It”s also a favorite of corporate governance experts, scoring in the 98th percentile against industry peers,” such as USC, Caterpillar and FreightCar America.
ITW entered the fastener business in 1923 by starting Shakeproof Company with a patent for a twisted-tooth lockwasher (see FIN, May 16, 2007). Today”s fastener brands include Buildex, Fastex, Ramset/Red Head and Shakeproof. \ �2007 FastenerNews.com