Anixter International Inc. stands to gain a foothold in the recovering residential construction market and a larger presence in security and low-voltage products with an agreement to acquire distributor Tri-Ed, Woodbury, N.Y., for $420 million.
Tri-Ed, which Anixter will buy from private equity group Audax Group, serves four major segments of the security business — video, access control, intrusion detection and fire/life safety. Tri-Ed employs over 600 people across 63 locations in the United States and Canada, serving over 20,000 active dealer and integrator customers with approximately 110,000 products.
Tri-Ed’s multi-channel distribution strategy integrates branches, technical sales centers and an e-commerce platform. Tri-Ed generated approximately $570 million in sales and $36 million in adjusted EBITDA over the trailing twelve months ending June 30, 2014.
“Through expanding our offering into highly complementary product lines, our customers will benefit from a broader set of products and solutions in the areas of video, access control, fire/life safety, and intrusion detection. As well, the combination brings Anixter’s expertise in IP video surveillance to Tri-Ed’s customers,” Bob Eck, Anixter’s president and CEO, said. “In addition, this transaction provides access to the residential construction end market at an attractive point in the recovery cycle as well as to a community of security integrators and dealers not currently serviced by Anixter.”
Ted Dosch, Anixter’s CFO and executive vice president of finance, said the Tri-Ed acquisition supports Anixter’s strategic growth initiative of expanding its security business.
The transaction is expected to close near the end of the third quarter of 2014 and will be financed using available cash and borrowings under a new term loan that is expected to be entered into prior to closing.
Anixter reported second quarter results of $1.59 billion in revenues — just about flat with the same quarter a year ago — and operating income of $92.4 million, up 7.8% over the second quarter of 2013. The company said its operating income growth would have been higher — around 9.3% — were it not for the impact of a drop in copper prices.