Avnet’s deal to buy Premier Farnell has come into sharper focus now the global distributor has announced it will sell its Technology Solutions operating group to Tech Data in a stock and cash transaction valued at approximately $2.6bn. Under the terms of the agreement, Avnet will receive $2.4bn in cash and 2.8 million shares of Tech Data common stock, currently valued at approximately $200 million.
Avnet is now free to focus on its electronic components distribution business which will have a new arm once the Premier Farnell acquisition has been completed.
“We believe the acquisition of Technology Solutions by Tech Data is the best decision for our employees, customers, suppliers and shareholders. This transaction presents us with the best strategic path for Avnet’s future success and profitability, and puts Technology Solutions in position to achieve breakthrough business results with Tech Data,” said William Amelio, chief executive officer of Avnet. “Moving forward, Avnet will focus its resources and investments on becoming a leader in design chain and supply chain services not only for our current customers and suppliers, but also for new markets. We will drive targeted investments in embedded solutions, Internet of Things (IOT) and critical digital platforms. By investing in these high growth areas, we can expand the breadth of our portfolio and attract new customers worldwide who depend on us to deliver world-class solutions.”
“This transformative transaction will position us as a premier global IT distributor with the most diverse end-to-end solutions from the data centre to the living room,” said Bob Dutkowsky, chief executive officer of Tech Data. “Tech Data has competed with and admired Avnet Technology Solutions for many years. We’re thrilled to start this journey together and are confident that our customers, vendor partners, employees, and shareholders will appreciate and benefit from the value that we will bring to the market. We look forward to welcoming the Technology Solutions team to Tech Data and are excited for the opportunities that this combination creates.”
Additionally, Avnet and Tech Data intend to partner on delivering world class IOT end-to-end solutions to the market.