July 28 US electric component distributor Avnet Inc agreed to buy British mini-computer maker Premier Farnell Plc for 691 million pounds ($911 million) in cash, trumping an earlier bid from Switzerland’s Daetwyler Holding AG.
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Avnet is in a bidding battle for UK-based Premier Farnell, which owns the element14 brand, with Datwyler Technical Components UK.
“This acquisition will strengthen Avnet’s digital footprint worldwide significantly”. Shares of Avnet fell 0.3 percent to close at $40.84 in the US on Wednesday, valuing the company at $5.2 billion.
Shares of Premier Farnell rose as much as 17.3 percent to 193 pence in morning trade, their highest since June 2015. “The convergence of Premier Farnell’s innovative online services with Avnet’s world class supply chain will create customer service unparalleled in the industry”, said William Amelio, interim Chief Executive Officer of Avnet.
The terms of the proposed acquisition are further described in the announcement released today in accordance with Rule 2.7 of the UK Takeover Code and available on Avnet’s website at www.ir.avnet.com.
“Premier Farnell will bolster our strategy to provide a differentiated digital experience from product ideation through its lifecycle”, Gerry Fay, global president of Arrow Electronics Marketing, said in a statement. Before Daetwyler made its offer on June 14, the company’s shares had fallen about 30% since September, when Premier Farnell cut its dividend and sold a non-core unit amid falling profit and slower sales growth in its key United Kingdom and North America markets. Avnet said it expected the deal to add to its earnings immediately upon its completion before the end of the year.
Bank of America Merrill Lynch acted as financial adviser to Avnet and Gibson Dunn & Crutcher LLP was the company’s legal counsel.
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Avnet will pay 185 pence a share in cash, according to a statement Thursday from the companies.
