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07 Nov 2006
Acquisitive distributor Avnet has snapped up Sun's largest distributor, Access Distribution for $412.5m.
The deal is subject to adjustments based upon net book value at closing. It is anticipated that the transaction will close by the end of 2006.
As a result, Access will be integrated into Avnet’s Technology Solutions Group (TS).
Avnet has been linked to several acquisitions in the past year, the most recent being the acquisition of Intechnology’s distribution business, but it pulled out last month (CRN, 16 October).
Roy Vallee, chief executive of Avnet said: ““Access’ deep-rooted relationships with Sun Microsystems and their extensive value-added reseller base provides a strong complement to Avnet’s existing partnerships. As a well-respected IT distributor with valuable franchises, strong technical capabilities and talented people, Access represents an excellent strategic fit. In addition to delivering more value to both companies' customers and suppliers, the combination creates significant value for Avnet shareholders.”
Vallee added, “We will maintain the focus on Sun through a separate business unit with dedicated resources, similar to how we operate with IBM and Hewlett-Packard. We plan to fund the transaction with existing liquidity and our preliminary estimate of expense synergies is approximately $15m. The transaction is expected to be immediately accretive and should add approximately $0.20 to EPS in calendar 2007 (excluding integration charges) while supporting the attainment of Avnet’s return on capital employed target of 12.5 per cent.”
Anna McDermott, chief executive of Access Distribution said: “We are excited about the benefits this relationship will bring to our customers, vendors and of course, employees. The combined expertise of both organisations will enable us to continue to grow and expand our business and offer tremendous value to the market."
Further Reading:
Avnet boss hints at ambitious strategy
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