Avnet, a global distributor of electrical components, IT solutions and technology services, has extended a cash offer to acquire Premier Farnell. Headquartered in Leeds, United Kingdom, Premier Farnell is a global distributor of electronic components and related products delivering engineering solutions to the electronic system design community utilizing multi-channel sales and marketing resources.
William Amelio, interim Chief Executive Officer of Avnet, stated, “This acquisition will significantly strengthen Avnet’s digital footprint worldwide. The convergence of Premier Farnell’s innovative online services with Avnet’s world class supply chain will create customer service unparalleled in the industry”.
The all-cash offer of £1.85 per share represents an equity value of approximately £691m and a 12.1% premium over the previous offer of £1.65 per share by Datwyler Technical Components UK Limited. Avnet has received undertakings to vote in favour of the transaction from Premier Farnell shareholders representing 15% of the issued shares (such undertakings will lapse if a higher offer is announced that Avnet does not match within 21 days). Upon completion, the transaction is expected to be accretive to earnings even before considering positive effects from any synergies realized, and supports Avnet’s return on capital goals.
Gerry Fay, President of Avnet’s Electronics Marketing, Worldwide, explained, “Premier Farnell will bolster our strategy to provide a differentiated digital experience from product ideation through its lifecycle.” He continued, “In addition to deepening our customer base, this acquisition will enhance our go-to-market strategy as we target the industrial Internet of Things with edge-to-enterprise products and solutions.”
Bank of America Merrill Lynch acted as financial advisor and Gibson Dunn & Crutcher LLP acted as legal counsel to Avnet in connection with this transaction.