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.