Premier Farnell is to be acquired by the Swiss-based distributor Datwyler Group for £792m. Datwyler subsidiaries include online distributors Distrelec and Germany-based reichelt elektronik. The deal has been made by Bidco, a wholly-owned subsidiary of Datwyler. The two companies cite a complementary product ranges and geographic presence as one of the rationale behind the acquisition. The deal will have to approved by shareholders and regulators.
The latter recently started selling product in the UK market. Between them and a wholesale distributor, Nedis, the three companies hold more than 500,000 products for the electronics, automation and ICT markets.
“Premier Farnell and Datwyler both have long and successful histories in high -service distribution for electronic components. By combining forces, we expect to significantly increase our competitiveness and extend our product range, facilitating a one-stop shopping experience for our wide range of customers from a multitude of industries,” commented Ulrich Graf, Chairman of Datwyler.
Datwyler believes the combination with Premier Farnell represents a strong strategic fit. Both companies share very similar strategies and business models and are complementary in terms of product range, distribution channels and geographic footprint.
While Premier Farnell holds a strong position in the EDE segment, Datwyler has historically focused more on the MRO segment.
Datwyler reckons believes that the new size enables the combined group to realise significant economies of scale worth between £36m to £70m compared to a standalone strategy.
Complemented by efficiency gains from overlapping cost bases, increased capillarity and acceleration of ongoing restructuring efforts on both sides, the combined group is also expected to deliver enhanced margins going forward.
Datwyler says it will invest significantly in the infrastructure of the combined companies. In a message to employees it says this will lead to exciting projects but also changes in your everyday work.
The Transaction is expected to close in Q4 2016. The combined group is expected to have sales of £1.8bn.