Avnet’s first quarter 2017 results were inevitably dominated by an acquisition and a divestment.
The acquisition of Premier Farnell is now a done deal and will release $70m to $80m in synergies. The sale of Avnet’s Technology Solutions (TS) business to TechData will be completed by Q3/Q4 of this financial year.
Avnet will transition to be a pure play electronic components distributor, and it will be heartened by a decent performance from Avnet Electronics Marketing (soon to become just Avnet?) which despite various setbacks at least exceeded expectations.
That’s not saying much as sales declined 9% year on year to $4.17bn, while income retreated 14.3% to $186.5m, affected by an exit from certain high volume supply chain engagements in Asia, and a troubled ERP implementation in the Americas.
At least the way ahead is now clear and Avnet will focus on “leveraging EM’s design and supply chain services with Premier Farnell’s digital platform to offer the broadest suite of products and services to support customers at every stage of the product lifecycle,” says recently installed CEO Bill Amelio.
He summed up the raison d’etre behind the deal.
“Just as technology has impacted many areas of commerce, it is changing how our customers want to interact from design through production. As engineers do more of their research online, we are confident that the combination of EM and Premier Farnell will allow us to reach a broader base of customers earlier in the design cycle with a much lower cost to serve.”