Distributor Avnet has completed its acquisition of Bell Microproducts in an all cash merger for $7.00 per share, which equates to an equity value of approximately $252 million and a transaction value of approximately $631 million.
The acquisition was approved by Bell Micro shareholders representing over 98% of the votes cast and has received all required regulatory approvals. The transaction is expected to be immediately accretive to earnings excluding integration and transaction costs.
Roy Vallee, Avnet’s chairman and chief executive officer, commented, “The acquisition of Bell Micro marks an inflection point in Avnet’s history as the clear leader in value-added technology distribution. Bell Micro is the largest acquisition in Avnet’s history on a revenue basis and substantially improves our global scale and scope competitiveness. It strengthens our position in the Americas and Europe and expands our presence in the fast growing Latin America market. We welcome the Bell Micro customers and suppliers as well as the talented employees at Bell who support them. Our value based management culture and discipline should allow us to achieve our stated return-on-capital goal of at least 12.5% on this transaction following the completion of the integration which we expect to occur by the end of our fiscal year 12 months from now.”
As a value-added distributor of storage and computing technology, Bell Micro had sales of approximately $3.0 billion in calendar year 2009. With more than 1,900 employees, the company offers a broad suite of integration and support services to OEMs, VARs, system builders and end users through 55 offices in the United States, Canada, Europe and Latin America. The company, which operates both a distribution and single tier reseller business, offers a portfolio of storage, computing, software and networking products from industry-leading suppliers. In calendar year 2009, revenues from North America, EMEA and Latin America were 42%, 41% and 17% respectively.
Rick Hamada, Avnet’s president and chief operating officer stated, “Bell Micro’s relationships with key hardware, software and services suppliers, further develops Avnet’s product portfolio and technical expertise. Additionally, Bell Micro enhances our value added solutions for the data center and enables us to consolidate our presence in the embedded market, adding to our critical mass and momentum as a leader in embedded technology. With strong customer and supplier relationships, we look forward to enjoying the benefits of the cross-selling opportunities that the merger with Bell Micro brings to Avnet.”
Bell Micro’s Latin America and EMEA businesses as well as its North American data center business will be integrated into Avnet Technology Solutions. Bell Micro’s North American embedded business, including embedded components like hard disk drives, will be integrated into Avnet Electronics Marketing. Avnet intends to explore strategic alternatives for the single tier reseller business, which had sales of approximately $450 million in calendar year 2009.