With its $380 million purchase of electronic components catalog Allied Electronics in June, U.K. cataloger Electrocomponents gained more than a $150 million U.S. business. The new owner also acquired access to the entire product line of Allied’s former parent company, manufacturer/distributor Avnet. At the same time, Electrocomponents will electronically supply Avnet with key point-of-sale data on its 500,000 customers worldwide.
Electrocomponents, which bought Allied largely to expand its primarily European business into North America, has been selling Avnet products for 15 years. But now Avnet will become its “largest and prime supplier of electronic components,” says Bob Lawson, chief executive of $1.09 billion Oxford, U.K.-based Electrocomponents. Avnet’s 130 product lines will greatly expand Electrocomponents’ line of 160,000 types of electrical, mechanical, and health and safety components.
By supplying its entire line to Electrocomponents, Avnet “will maintain close to half of the sales we had through Allied,” according to Steve Church, president of Fort Worth, TX-based Avnet Electronics Marketing Americas. “But we’ll only be shipping to one company, rather than servicing tens of thousands of catalog customers in small quantities.” Avnet stands to gain customers in the deal, since Electrocomponents will be sharing its customer names and their buying histories with the distributor. Avnet will pluck names from Electrocomponents’ smaller original equipment manufacturers (OEMs) that show growth potential, and have its 80-member field sales force try to sell to them directly.
Lawson says that the deal also works to Electrocomponents’ advantage because his company is better-suited to meeting the volume requirements of “emerging” companies rather than conglomerates. “We help emerging companies develop a product, and then we have no means of supporting them when their requirements become high-volume,” he explains. “We shall provide the required service to emerging customers and as they begin to recognize the need for volume, we shall pass that information over to Avnet.”
Electrocomponents also plans to mail the Allied catalog into the U.K., France, Germany and Italy. And just as the Allied catalog will remain distinct from that of Electrocomponents, the companies’ Websites will remain separate as well. “We see no value in trying to create a standardized Internet offer,” Lawson says.