Acquired companies don’t join Amphenol. They join the portfolio — and keep running themselves.
Love at first sight
Adam Norwitt joined Amphenol in 1998 as a young strategy consultant. He described the experience as “love at first sight” — not with the products, but with the culture. What he found was a company that called itself a culture of “intrapreneurship”: entrepreneurial thinking inside a large organisation.
He became CEO in 2009. Fifteen years later, Amphenol has grown from $3 billion to $20 billion in revenue, acquiring over a hundred companies along the way. The stock has compounded at 19% annually for 20 years, nearly double the S&P 500.
The model that captured Norwitt hasn’t changed. If anything, he’s made it more extreme.
135 companies, one portfolio
Amphenol is organised into 3 divisions, 14 groups, and 135 operating units. Each unit runs autonomously. There’s no integration playbook, no shared services mandate, no standardisation push from headquarters.
When Amphenol acquires a company, the structure stays intact. The management stays. The brand often stays. What changes is the access to capital and the freedom from quarterly earnings pressure.
Norwitt describes acquired companies as retaining “complete operational autonomy.” This flexibility lets teams make rapid decisions without waiting for head office approval. In a business where customers need fast responses and custom solutions, that speed is a competitive advantage.
The extreme version: Amphenol doesn’t even require its operating units to buy Amphenol connectors. If a unit can source a component cheaper from a competitor, they’re free to do it. That’s how seriously they take local decision-making.
Great people, great products, great position
Amphenol’s acquisition criteria are deceptively simple: “Great people, great products, great position.”
They’re looking for businesses that are already excellent — companies with strong market positions, capable leaders, and products customers depend on. They’re not looking for turnarounds or fixer-uppers. The model assumes the acquired company knows its market better than Amphenol ever could.
The result is discipline. Amphenol walks away from deals where the people aren’t staying, the products aren’t differentiated, or the market position isn’t defensible. They’ve spent $7 billion on acquisitions over the past decade, but only on businesses that fit.
In 2023 alone, they closed ten acquisitions adding $600 million in revenue. The pace is high, but the standards don’t slip.
Connectors all the way down
Unlike conglomerates that diversify into unrelated businesses, Amphenol has stayed focused on interconnect solutions — connectors, cables, sensors, antennas. They’re now the world’s second-largest player in a $400 billion market.
But within that focus, the diversity is enormous. Amphenol connectors are in military aircraft and mobile phones, data centres and automobiles, medical devices and industrial equipment. Each end market has different cycles, different customers, different technical requirements.
The 135 operating units map to this diversity. A unit serving defence customers operates differently from one serving consumer electronics. Amphenol doesn’t try to homogenise them. The portfolio absorbs cyclicality; individual units optimise for their specific markets.
Growing at twice the industry rate for decades isn’t about entering new markets. It’s about going deeper in the markets they already understand.
The anti-integration thesis
Most acquirers can’t resist the urge to integrate. Shared services, combined sales forces, unified systems — the synergy playbook is standard practice.
Amphenol runs the opposite play. Integration destroys what made the acquired company valuable: the customer relationships, the technical knowledge, the speed of response, the entrepreneurial culture. Norwitt’s bet is that preserving autonomy creates more value than any synergy could.
The evidence supports him. Operating margins have expanded to 22% — a record — while maintaining the decentralised structure. The 135 units compete and collaborate without central coordination, each finding its own path to profitability.
The discipline required is harder than it looks. Saying “no integration” is easy. Watching a subsidiary make decisions you’d do differently, and staying out of it anyway, is hard. Amphenol has done it for decades.
What the numbers show
The financial results reflect the operating model:
Revenue: $15-20 billion, growing at 2x the connector industry Operating margin: 22% (record) ROIC: ~20% Gross margin: 34% Acquisitions: 100+ under Norwitt, $7B deployed in last decade
Amphenol converts profits to cash reliably. In 2024, they returned $1.3 billion to shareholders while continuing to acquire. The balance sheet stays conservative — they don’t lever up to do deals.
The compounding comes from doing the same thing repeatedly: find excellent businesses, let them run, redeploy the cash into more of the same.
What makes it hard to copy
The Amphenol model sounds simple. Buy good companies, don’t integrate them, let local teams decide. But execution over decades requires:
Patience with autonomy. Headquarters can’t second-guess every decision. When a unit struggles, the instinct is to intervene. Amphenol resists.
Discipline on criteria. “Great people, great products, great position” sounds obvious, but most acquirers talk themselves into marginal deals. Amphenol’s track record suggests they actually walk away.
Cultural continuity. Norwitt has been at Amphenol for 27 years, CEO for 16. The culture he fell in love with in 1998 is the culture he’s preserved and extended. Leadership transitions break most decentralised models; Amphenol has maintained theirs.
Compounding reputation. The best acquisition targets — owner-operators who care about their company’s future — seek out buyers known for keeping businesses intact. Amphenol’s reputation opens doors that integration-focused acquirers never see.
Connectors aren’t glamorous. The business model isn’t complicated. What Amphenol has done is execute the same strategy, with the same discipline, for longer than most companies stay focused on anything.
Connects to Field Notes: Synergies That Deliver
Connects to Library: Tacit Knowledge · Skin in the Game
See also: The Heico Playbook — Another extreme decentralisation model in aerospace. The Danaher System — The opposite approach: operational integration as the value driver.