Anixter Buys Tri-Ed

Author: John Honovich, Published on Aug 11, 2014

Anixter Security has been struggling in 2014, with revenue actually declining in the most recent quarter. In particular, Anixter has emphasized that they are doing poorly in the low end of the market.

And who better at the low end than Tri-Ed? (besides ADI)

The big news is that Anixter is buying Tri-Ed.

In this note, we breakdown Tri-Ed's financial details, examine the strategic fit and the financial impact of the deal.

******* ******** *** **** ********** ** ****, *********** ******** *********** *** **** ****** *******. ** **********, ******* *** ********** that **** *** ***** ****** ** *** *** *** ** the ******.

*** *** ****** ** *** *** *** **** ***-**? (******* ADI)

*** *** **** ** *********** ** ****** ***-**.

** **** ****, ** ********* ***-**'* ********* *******, ******* *** strategic *** *** *** ********* ****** ** *** ****.

[***************]

Price / ****

******* ** ****** $*** ******* *** ***-**. ****'* ******** **** than ***-**'* ****** *******, ***** *** **** * **** ******* ($570 *******).

** ***-** *********** * *** ** ******** ********* *** ***** net ************* ** **** ** *** ********, **** ******* ********* an '******** ******' ** *%. ** ******, **** ****** ****** out ********* ****** **** ********, ***** *** ************ / ************. Factoring **** **, ** ** ******** ***-** *** *** **** profits, ***** ** *** ********** ***** *** *********** *** ************ business **.

******* ******** ******** ** ****** **** ***-**'*. ** ******** *******'* annual ******* *** ******** ** ** ~$* *******.

*** *********** ***** ******* ** ******* ********** **% ** ****.

*******

******* **** **** ***** *** * *********** '*******' ** *** Tri-Ed **** **** ***.

Tri-Ed's ******* *********

*******'* *********** ******* **** ******* ** ***-**'* *******:

  • *****: **% / $*** ******* ** ***-**'* ******* ** **** video
  • *** ***** **% ** ***-**'* ******* ** **** ********** **** - ******, *********, ****, ***. [*** *********]
  • ** ********: **% / $*** ******* ** ***-** ******* ** from *** **, ******* **** ******
  • *********** *****: **% / $*** ******* ** ***-**'* ******* ******* is **** *** *********** ******, *** **** **** **********
  • ****** ********: **% ** ***** **** **** **** ********
  • *** *** ******* ********: **% ** ***** *** ** ******* with **** **% ** *********** *** **% ** ******** ********

*** ****'* *** ***** **** *** ****:

Previously ******** ** ****

***-** *** ********* **** **** *** ***** ***** ******* ******* ***** *****. *** ***** ***** ** ****, under ********* ******** ****** ***********-** *** ******** **** ***** *********** ********.

Recent *********

***-** ****** *** ********* *** ********* ** ****** *****, **** recently ********** **************** *********** ***** *** ********* **.

Consolidation ******** ************ ** *** **

*** **** ****** **** ********* ** ** *** **, *** core ****** ** **** *******.

** ******** **** ******** **** **** ******* *** ~**% ** security ******* ***** ** *** **. **** **** **** **** be **** **********, ** ********** ***** *****. *******, **** **** not ** *** ****** ** ********* / ***** *** ******.

***** ************'* ******* ********* ** ******** *********** *********** ** *** Internet ***, **** *********** **** **** **** ******** ************, ********* duplicative *********.

*************

******* *** ***-** **** ************* ******** ** ********* ***** ** the ******, **** ******* ***** ******* ** *** **** *** IT ****** *** ***-** ** *** *** ***.

** ************, ***-** ***~** ******** ****** ******* ********** *** **, **** **** *** *********** **:

******

****** ******** ******* ** ***** *** ***** *** ** *** market, **** *** ***** ******* * ****** / ***** ******** throughout *** **, ***** ***** ** ** ***** **** ** its ****** *********.

*** ** **** ****** ** ** ******** / **** ** this **** ** ** ******* * ****-********** *** ****.

Comments (28)

Poll:

As an integrator, ADI hasn't competed against us in bids and sales. Anixter has. One of the reasons we don't do business with Anixter. Now this is a reason not to do business with Tri-Ed. The low end may eventually fall to the box stores and online stores while mid to top tier products and installations may keep to the distributors that don't try to pander to the low end market.

While most (all?) respectable manufacturers do not support a direct to end user sales model, there ARE times when it's a logical approach. Using a distributor to pass the blame onto is a convienient work-around.

There is a small but growing segment of usually larger end-users that are 100% capable of being their own "integrator". If you want to maintain a traditional security channel, having a distributor that handles these cases can help you maintain your innocence, so to speak.

Whie most manufacturers will state they don't support this, that isn't always 100% true.

I understand that and can't wholly blame them. Yes, I know there are some very large customers that can handle their own jobs and I can't expect every distributor to be loyal to little 'ole me. But when I keep seeing Anixter on almost every bid, small and large, because they are actively going after it, then that is the bed they make. I'm making no claims on the right or wrong of it except if they try and say one thing and then do another. I.e. the article John referenced above, "Does Anixter Sell Direct To End Users? YES"

I have not seen Anixter generally go that route, especially because they certainly don't have an installation group. When they are bidding against you so regularly what do you think is the rationale? Are these very small jobs where the end user could conceivably do their own install? Are they bidding at a street price or at a dealer price level?

We've already had an extremely in-depth and contentious debate on Anxiter selling to end users.

We are not going to have it here again.

This thread is for discussion of the Anixter / Tri-Ed deal.

...And I have no further wish to go into more detail for our own privacy and agree with John wanting to keep on topic. My comment was only to express our views from a business aspect and what would influence our business relations, and how that would be affected by this aquisition.

What I've seen them do multiple times over the years is: they sell the end user directly providing all the hardware and if the user needs installation, Anixter calls one of their smaller integrators and has them quote the install only. They once asked me to quote like this but they were dictating the hourly rate at about $20.00 below market and if I wanted the work I had to be willing to do at that price. Forget it!!!! If Anixter wanted to truly support the channel, they would work with the end user to win the design, bring the integrator in at the front end and let them quote the entire project to the end user using Anixter as thier supplier. Whats so complicated about that? If the user is doing thier own install, great - the equipment sale should still go through the integrator and then Anixter will have won points with the integrator community, the user will have a capable integrator to call just in case they run into trouble on the install & need assistance and the integrator is positioned with the user to potentially get future business from them on other service or larger install projects.

I voted this as a "good move", but only for a purely tactical reason on Anixter's part.

They didn't need to buy Tri-Ed in order to target the low end of the market. Anixter could have just as easily cut their prices, or utilized Accu-Tech as the budget arm. I think Tri-Ed's holding company wanted to get rid of that business and Anixter snagged them just to keep ADI or someone else from doing so.

I don't see the distribution business having a lot of glamorous future. These days product demand and educated is handlied directly via online marketing. There was a time when a large proportion of distributor sales/order guys were seasoned (at least somewhat) and they would be the best practical outlet for advice on parts and products. These days I don't really see the same thing, you have a lot of people that have never actually worked in any outside capacity and they're regurgitating the same perspective you can get from a manufacturers website.

Distribution outlets are handy for integrators that don't want or need to stock a lot of product and spare parts. But it's silly to think that distributors have a lot of influence in the broader market perspective. Sure they might get lucky and actually drive a project but it's more along the lines of "even a blind squirrel sometimes finds a nut".

This purchase is a good short-term move for Anixter. They'll pick up some business via Tri-Ed, and they'll probably be able to cut a LOT of duplicate jobs and consolidate some offices and locations. But we're not going to see Anixter (or any other similar distributor) suddenly emerge as a force in the industry.

One thing that sticks out to me as telling is the purchase price is less than a single year revenue. ($420M vs $570M)

Just how miserable are profits for security distributors anyway?

Answer: Pretty miserable.

Good surveillance manufacturers typically get 2x or more.

Axis is at 3x, Avigilon 4x, etc.

Not great, I'll tell you that much. It's a cutthroat business with razor thin margins. As Undisclosed A said upthread, eventually the low end is going to be all online and big-box places.

I think that this is a good move for Anixter.

We sell to both distributors and their business model is completely different. I think Anixter has a lot of difficulty with the traditional security dealers because of their lack of showrooms/counter sales and their reliance on phone sales only. This is completely different from Tri-ED/ADI where a dealer can walk in and have a coffee while buying 7 motion detectors, a door contact and a DSC panel.

This provides Anixter with a traditional security distribution presence, one that is firmly ensconced in the mass of dealers selling alarm/access/video.

Long-term, I think that Anixter will run the security business in parallel with their wire-and-cable businesses and not integrate them together at the branch level. I would not be surprised if Anixter folded their security specialists into the Tri-ed mix and renamed the whole thing "Anixter Tri-ed" (until the Tri-ed name disappears completely in a few years).

All-in-all a good move for Anixter and at a good price, too (considering the cost savings they will have once both organizations start cleaning house...)

From what your saying it sounds like almost as good a fit as you can have with two large players in a mature industry.

And though Tri-Ed's business model is much more like ADI than it is Anixter's, we shouldn't automatically assume that an ADI - Tri-Ed deal would provide more value than the Tri-Ed Anixter one. Certainly there could be an easing of price pressure for ADI if they acquired a low-ball competitor, but since they share many of the same customers already, the new customer sales upside is not as great. So it makes sense that Anixter would pay more than ADI would, though if ADI had any idea of the deal, they would have bid just to keep the price as high possible for Anixter.

and renamed the whole thing "Anixter Tri-ed"...

I say no, it invites the rejoinder: " and Fail-ed." Unless of course they also acquired a company named "True". :)

I say no, it invites the rejoinder: " and Fail-ed." Unless of course they also acquired a company named "True". :)

Trunkslammorama.

Funny!

The Tri-Ed in my area is so understaffed compared to ADI, I sure hope they shift some staff from Anixter to Tri-Ed lol

Does the slammer reference pertain to them selling to trunk slammers? I've never used nor heard of them.

Tri-Ed? Yes. I am sure some buy parts from local branches when they need something right away but most real integrators are not depending on Tri-Ed for much more than that.

And Tri-Ed's revenue breakdown (summarized in the above post) supports that.

The best part about this is that Dropcam sold for $130M more. I know that these are two different busniess but that is still cool. I know we make fun of trunckslammers here but they are a healty part of the the ecosystem. Becuase they made security super cheap, that helped mature the industry and create truck slammer manfactures in China that can compete with bid greedy big manfactures.

Yes, Dropcam sold for $130 million more on probably less than 1/10 of Tri-Ed's revenue. Quite a contrast...

What will happen with brand representations overseas from Tri-Ed? Will Anixter be able to sell them in all of their overseas branches?

This is just more uninspiring news from the security industry. The "demand creators" (yeah right) at Anixter join forces with the tired old "box movers" at Tri-Ed...this is so entirely uninteresting to me that I just had to chime in. I'm sure the counter guys at ADI are thrilled though. Um, as thrilled as those guys get, anyway.

I was thinking Security-R-Us would be a good new name.

This best analogy that comes to mind is a large grocery store chain buying a convenience store chain.

Yes, they both sell milk, soda, eggs, chips, diapers, and dog food, but two different strategies and delivery methods.

If you want to buy everything for a large Thanksgiving dinner, you go to the grocery store (Anixter). If you need a loaf of bread in a hurry, go to the corner quickie mart (Tri-Ed).

Typical deal for a maturing industry. Basically they preform no valuable product or service. No local stock. No local service. Once you see a decline on the number of feet on the street, then it will change to a more mfg to integrator modle. Lets ask Lenel how it owrks for them. How the market further fractures will be the telling blow.

Remember plug and play has its down side for integrators. These move are working for the benifit of the end user and mfg. Again this is just my opinion. Look at the consolidation of Camera companies and VMS mfg.

Eventually online purchases will prevail to be the bank for this industry.

We estimate that combined they will account for ~20% of security product sales in the US.

Of product sold thru distribution or overall?

Login to read this IPVM report.
Why do I need to log in?
IPVM conducts unique testing and research funded by member's payments enabling us to offer the most independent, accurate and in-depth information.

Related Reports

Buy Arecont: Top Bid $10 Million Cash on May 22, 2018
Last year, Arecont had a deal for a purchase price of $170 million (see Failed Arecont China Acquisition). This year, Arecont has a deal for a...
Stealth / UCIT - Remote Video Monitoring Provider Profile on May 18, 2018
Can 2 remote video monitoring companies, Stealth Monitoring from the US and UCIT from Canada combine to impact the market and compete in a changing...
Worst Manufacturer Technical Support 2018 on May 16, 2018
5 manufacturers stood out as providing the worst technical support to 190+ integrators in new IPVM results. These integrators answered: In the...
March Networks Targets Cannabis Market on May 10, 2018
Will the next March Networks customer appreciation event be held a steakhouse or at a Taco Bell at 2 am? Can March sell the types of systems to the...
Canon Acquires Briefcam, Now Owns Briefcam, Milestone and Axis on May 09, 2018
Canon already owns two of the biggest names in video surveillance, Axis (acquired in 2015) and Milestone (acquired in 2014). Now, Canon...
Nortek Acquires IntelliVision on May 08, 2018
One of the largest intrusion manufacturers, Nortek, has acquired the self-proclaimed 'Leader in AI-Based Video Analytics Software',...
Integrators Divided On Website Importance to Business (Statistics) on May 04, 2018
Are websites important? Still quite a number of integrators have no websites.  New IPVM statistics show that nearly half of all integrators find a...
Correcting Hikvision USA's False Accusations on May 01, 2018
Hikvision USA has falsely accused IPVM's DeepInMind test. The truth, which Hikvision USA knows, despite their statements to the contrary, is...
Anixter Acquires 'PSIM Platform Inner Range - "Heart of Our Technology Differentiation" on Apr 30, 2018
Anixter Security has made a bold move, acquiring what it calls a PSIM platform as part of a $150 million deal, with Anixter's CEO Bob...
Netwatch / NMC Mega Deal Targets Global Remote Video Monitoring on Apr 27, 2018
Big money has entered the remote video monitoring market. While remote video monitoring has been done for more than a decade, the market has...

Most Recent Industry Reports

VMS Server Sizing on May 25, 2018
Specifying the right sized PC/server for VMS software is one of the most important yet difficult decisions in IP video surveillance. In the past...
China: Foreign Video Surveillance Is Security Risk on May 25, 2018
The Chinese government has long acknowledged that foreign video surveillance is a 'risk to national security' and has increasingly and almost...
US House Passes Bill Banning Gov Use of Dahua and Hikvision on May 24, 2018
Today, the US House of Representatives passed H.R. 5515, a bill that includes a ban on the US government's use of Dahua and Hikvision. This follows...
Hanwha Wisenet X Analytics and VMD Test on May 24, 2018
Continuing our updated testing of camera analytics, we tested Hanwha's Wisenet X analytics for over two weeks in multiple scenes, indoors and out,...
Ambitious Mobile Access Startup: Openpath on May 24, 2018
This team sold their last startup for hundreds of millions of dollars, now they have started Openpath to become a rare access control small...
Amazon's "Dangerous New Face Recognition Technology" Says ACLU on May 23, 2018
The ACLU has caused a stir, with a new report Amazon Teams Up With Law Enforcement to Deploy Dangerous New Face Recognition Technology,...
Software Only VMS vs NVR Appliances on May 23, 2018
Should you buy your own PC/server and load VMS software on it or get a turnkey appliance (both hardware and software, e.g., NVR, Hybrid DVR) from a...
Buy Arecont: Top Bid $10 Million Cash on May 22, 2018
Last year, Arecont had a deal for a purchase price of $170 million (see Failed Arecont China Acquisition). This year, Arecont has a deal for a...
Installing Box Cameras Indoors Tutorial on May 22, 2018
This tutorial starts our physical installation for video surveillance series, starting with Box Cameras, one of the oldest and most basic types....
The Hikvision Smart Classroom Behavior Management System on May 22, 2018
Hikvision's rapidly growing offering of analytics, which we most recently examined with Hikvision's ethnic minority analytics, is now going into...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact