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10 Oct 2008
Avnet has bolstered its European components business by snapping up London-listed Abacus Group for around £42.2m.
Pan-European components distributor Abacus announced it was up for sale last month after complaining its flagging share price had prevented it from pursuing its planned acquisition strategy.
The Newbury-based firm boasts 1,000 staff and 39 offices and five warehouses across ten European countries. Its business is split between three trading entities: Abacus Electronic Component Distribution; Abacus Embedded (specialist distribution); and Alpha 3 Manufacturing.
Further reading
Avnet’s recommended cash offer represents a 115.7 per cent premium on Abacus’ closing share yesterday. The deal has already been backed by directors and other shareholders representing 30.27 per cent of Abacus’ share capital.
Anthony Westropp, chairman of Abacus, said: “The Abacus directors believe that Abacus' share price has failed for some time to reflect the underlying value of the business. This, coupled with the high level of borrowings, has also frustrated Abacus from pursuing its preferred strategy of expansion through acquisition and acting as consolidator in the sector.
“Not only does the Avnet offer represent a healthy premium for shareholders, during a period of challenging trading conditions, but there is also a strong strategic business rationale for the acquisition."
Avnet chief executive Roy Vallee said: “The acquisition of Abacus represents an excellent addition to Avnet's Electronics Marketing group in Europe.”
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