Avnet has opened a battle royal for Premier Farnell by making a £691 bid for the UK-based distributor. It remains to be seen whether Datwyler which made an agreed offer of £615m for Premier Farnell in June will make a counter offer.
The board of Premier Farnell has dropped its recommendation for the Datwyler offer and transferred its affections to the Avnet offer.
It has long been speculated that one of the big broadline distributors would look to enter the high service distribution arena.
The most obvious targets were Premier Farnell and Electrocomponents, both publicly quoted companies.
A statement from Premier Farnell said, “In evaluating the Avnet Offer, the Board of Premier Farnell has considered various aspects of the Avnet Offer including valuation, transaction timing and execution risk, and considers the Avnet Offer to represent a superior offer for Premier Farnell shareholders, as compared to the Datwyler Offer.”
Avnet says that it believes the combination of Avnet and Premier Farnell represents a strong strategic fit and is highly attractive. Both companies share very similar strategic values and are highly complementary in terms of product range, distribution channels and geographic footprint.
The statement continues, due to the changing preferences of Avnet’s design engineering customers to do technical research online, and increased pressure on distributors as upstream consolidation of component suppliers accelerates, Avnet believes having deep digital technical content and the ability to service customers earlier in the design process will be increasingly important. A combination with Premier Farnell would dramatically accelerate Avnet’s digital capabilities, affording it pure play offerings in both the broad-line and high value space. Avnet also believes there are significant synergies between its business and that of Premier Farnell that can accelerate the growth of the Combined Group.