Anixter buying Distribution Dynamics after bankruptcy filing

Distribution Dynamics Inc. (DDI) recently agreed to sell its assets and operations to Anixter International Inc.

05/06/2004


Distribution Dynamics Inc . (DDI) recently agreed to sell its assets and operations to Anixter International Inc . for $25 million. The proposed sale is subject to approval by U.S. Bankruptcy Court for the District of Minnesota, where DDI has filed a petition for relief under Chapter 11. DDI distributes fasteners and small components to original equipment manufacturers (OEMs).

The company’s agreement with Anixter doesn’t include its operations in Kansas City, MO, which Anixter acquired under another purchase agreement. DDI’s operations in Portland and Medford, OR, are also excluded from the latest sale.

In connection with its proposed purchase, Anixter plans to assume some of DDI’s obligations as part of the facility and operating leases that apply to the operations it’s buying. Anixter also plans to offer employment to the staffs at DDI’s former facilities. In addition, Anixter intends to offer to purchase certain valid, unsecured pre-petition claims in the bankruptcy to the extent those claims apply to product sales to the operations that will be acquired by Anixter.

"We have an excellent team of people at Distribution Dynamics, all of whom have worked exceptionally hard to service a blue chip group of customers. 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," says Dominic Polimeni, DDI’s president and CEO. "Anixter has built a significant presence in supplying fasteners and other small components, through its prior acquisitions of Pentacon and Walters Hexagon. It is 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 for which DDI has earned one of the finest reputations in the industry.

"At the same time, because of Anixter's size, its offers excellent career opportunities for our employees. Lastly, in the current situation, it is likely that the recovery, if any, by unsecured creditors against their pre-petition claims will be negligible. 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. We’re also pleased to announce that our lenders have agreed to continue to support us, in order to provide the liquidity necessary for DDI to meet its commitments and to continue to operate during the period of the bankruptcy proceedings."

Robert Grubbs, Anxiter’s president and CEO, adds that, "We have committed significant financial resources to building a fastener-focused OEM supply business over the past couple of years. Prior to the pending acquisition of DDI, we generated approximately $300 million in sales per year from the sale of fasteners and other small components to OEMs in the U.S. and U.K. We believe that acquiring DDI’s operations will expand our geographic coverage in the U.S. and make us an even more attractive supplier to multi-location OEMs looking to improve supply chain efficiency.

"If we’re successful in completing this acquisition, we intend to convert the DDI locations to the same business systems as our Pentacon operations. For customers and vendors, this will be an important step in giving our U.S. service capabilities the same look, feel, and quality. We believe that one of the keys to success in any distribution business is developing common systems, processes, and corporate culture to make it as easy and consistent as possible for large customers to do business with us.

"Unfortunately, we understand that DDI's financial condition makes it impossible for DDI to make all of its unsecured creditors whole. Nonetheless, Anixter recognizes the importance of those manufacturers who supply products to DDI to the overall continuity of the supply chain to the customer, and to the future success of the business. We believe that the continued support of DDI's lenders during the bankruptcy proceedings, combined with Anixter's willingness to purchase certain pre-petition claims, will minimize any risk to the continuous supply of goods through DDI to its customers."

—Jim Montague, news editor, Control Engineering, jmontague@reedbusiness.com





No comments
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by...
The System Integrator Giants program lists the top 100 system integrators among companies listed in CFE Media's Global System Integrator Database.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
This eGuide illustrates solutions, applications and benefits of machine vision systems.
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
Sensor-to-cloud interoperability; PID and digital control efficiency; Alarm management system design; Automotive industry advances
Make Big Data and Industrial Internet of Things work for you, 2017 Engineers' Choice Finalists, Avoid control design pitfalls, Managing IIoT processes
Engineering Leaders Under 40; System integration improving packaging operation; Process sensing; PID velocity; Cybersecurity and functional safety
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.

Find and connect with the most suitable service provider for your unique application. Start searching the Global System Integrator Database Now!

SCADA at the junction, Managing risk through maintenance, Moving at the speed of data
Flexible offshore fire protection; Big Data's impact on operations; Bridging the skills gap; Identifying security risks
The digital oilfield: Utilizing Big Data can yield big savings; Virtualization a real solution; Tracking SIS performance
click me