There are 300,000 reasons why Avnet and Datwyler are vying to buy Premier Farnell.  They are all engineers signed up to the UK-based distributor’s element 14 online community.

Avnet needs them because it has lost ground on design-ins against the competition – though there are signs of a recovery – and it needs to cement a strong position with the design community pronto to continue the comeback.

Datwyler wants them to give it a credible play in the global distribution stakes. Right now it has Distrelec and Reichelt, two pan-European players in its stable. That doesn’t hack it on the world stage.

Avnet has a clear view of what Premier Farnell will bring to its party.

“If you look at what they do for engineers from aviation to prototyping, they’ve been very successful in that space,” Gerry Fay, President, Avnet EM told an analyst briefing following the company’s Q4 financial results.

“Premier Farnell is going to help us engage more deeply with design engineers, plus the digital design tools that we put into place, starting in the Americas and now rolling out around the world, are helping us increase both our registrations and our design wins,” added Fay.  “We think that that’s a huge opportunity for us to help an engineer today move from aviation and prototyping where they would then have to try to find a high volume distributor to be able to help them get to market.”

In other words Avnet will offer a seamless process for engineers and their companies to buy products from protoyping samples to production volumes. Makes sense.

Datwyler is ambitious for its distribution business. It recently invested in a shared infrastructure platform for its businesses and now needs to muscle up the business to get some economies of scale.

To attain a stronger position Datwyler has to buy, it can’t grow organically fast enough so don’t be surprised to see it return with a higher bid, especially following its encouraging first half financial results announced last week.

This could well turn into a battle royal for one clear reason.

There isn’t much out there to buy that fits the bill for either Avnet or Datwyler, given their ambitions.

Digi-Key, a private company and the high service market leader, is probably too expensive even if it was up for sale. It isn’t.

Mouser is part of Warren Buffet’s Berkshire Hathaway conglomerate. With sister company TTI it represents a powerful force in the market. Any suitor would have to buy both and that’s unlikely.

Which leaves the two UK-based outfits – Electrocomponents and Premier Farnell.

Electrocomponents, parent company of RS Components, is in a recovery mode, led by Lindsley Ruth who was poached from Future Electronics to be CEO in April last year.

It has a sizeable industrial business selling everything from screwdrivers to wrenches to head torches, and has invested in its own RSPro own label brand which straddles the electronic and electrical products sectors.

Working out what to do with these businesses would be a distraction, especially for Avnet, which will have little taste for flogging pliers and micrometers.

That is why Avnet has targeted Premier Farnell. Whatever its recent business performance, not great it has to be acknowledged, it has divested much of its industrial business and now 86 per cent of its revenues come from the electronics design engineer facing Farnell element14/Newark element14. Hence its position as Avnet’s preferred dance partner.


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