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Avnet: One Step at a Time

In the early 1900s, Charles Avnet began selling radio components in various port cities in the U.S. Of course, by the mid-1920s, radios became a consumer item and Avnet's business soared. In fact, he was adept at changing with the times. In the 1930s, he entered the car radio market. In World War II, he sold equipment to the U.S. armed forces.

By 1959, Avnet went public. Now, the company is a powerhouse in the distribution of semiconductors. From 1994 to 1999, the company's electronic components and computer distribution business increased from $3.55 billion to $6.35 billion in sales.

The electronic component distribution business has undergone much change. It is no longer a matter of buying products in volume and selling them in smaller quantities to customers. For example, Avnet offers services like supply-chain management, engineering design, and enterprise solutions.

What's more, Avnet has built a comprehensive Web presence (there are more than 75,000 components catalogued). For instance, the FasTrac helps customers and suppliers to collaborate with Avnet to achieve "first to market" product launches.

Key to the company's growth has been its acquisitions. A critical deal was the purchase of Marshall Industries (the price tag was $762 million). In the past year, Marshall Industries had about $1.7 billion in sales. Basically, the deal makes Avnet the biggest electronic components distributor in the Americas.

The acquisition has had a nice impact on Avnet. In the past quarter, sales were $2.73 billion, which was up 66 percent from the same period last year. The net income was $66.6 million.

But according to the company, the benefits of the acquisition have yet to be fully realized. And, of course, with the recovery in the semiconductor industry, Avnet is poised to continue its strong growth rate.



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