Avnet has acquired Bell Microproducts for a transaction value of about $US549 million.
The all cash merger includes $US7 per share, which equates to an equity value of about $US252m.
The acquisition has been approved by the boards of directors from both companies and is subject to the approval of Bell's shareholders as well as customary regulatory approvals. The transaction is expected to close in the next few months and should be immediately accretive to earnings excluding integration and transaction costs.
The storage and computing distributor made approximately $3 billion in sales during the 2009 calendar year and has more than 1900 employees. Bell also provides a broad range of integration and support services to OEMs, VARs, system builders and users through its 55 offices across US, Canada, Europe and Latin America.
In a statement, Avnet chairman and CEO, Roy Vallee, said it was excited about the opportunity to build additional scale and scope in storage and computing solutions as well as increasing its presence in Latin America. Bell's position in datacentre products and embedded systems complements Avnet's strategy and creates opportunities for cross selling, Vallee said.
The company's position in hard disk drive distribution substantially increases Avnet's exposure to this product segment which is currently focused on embedded computing, he added.
“In support of our focus on value-added solutions distribution in North America, we intend to explore strategic alternatives for the single tier reseller business,” Vallee said. “The combination of Bell's strong customer/supplier relationships and talented employees, coupled with our value based management culture and discipline, should allow us to achieve our stated return on capital goals on this transaction following the completion of the integration.”
Founder and CEO of Bell, Don Bell, said this transaction delivers excellent value to its shareholders.
“Given the rising demands of global technology markets, the investment required to deliver leading edge technical support and competitive supply chain networks continues to grow,” Bell said. “Avnet's financial resources and global infrastructure will allow the Bell organisation to deliver industry-leading value to our customers and continue our long history of growth and market share gains."