Avnet has entered into a definitive agreement to acquire Bell Microproducts in an all cash merger for $7 per share, which is approximately $252m and a transaction value of around $594m assuming a net debt position for Bell of $342m at face value as of December 31, 2009.
Founded in 1988, Bell is a value-added distributor of storage and computing technology. With over 1,900 employees, the company offers a suite of integration and support services to OEMs, VARs, system builders and end users through 55 offices in the US, Canada, Europe and Latin America.
The transaction is expected to close in 60 to 120 days, deliver at least 12.5% ROCE post integration and is expected to be accretive to earnings excluding integration and transaction costs.
Roy Vallee, chairman and CEO of Avnet, said: ““We are very excited about the opportunity to build additional scale and scope in storage and computing solutions as well as increase our presence in the fast-growing Latin America market. Bell’s position in datacentre products and embedded systems complements Avnet’s current strategies and creates opportunities for cross selling.
“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.”
The acquisition has been approved by the boards of directors of both companies and is subject to the approval of Bell’s shareholders and customary regulatory approvals.
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