Farnell Electronics Plc has been selling again. This time the Wetherby, Yorkshire electronic component and distribution and manufacturing company has sold its entire manufacturing division to Savidon Ltd, a company formed the purpose and controlled by CINVen Ltd funds, for ú79.9m in cash. The sale is part of Farnell’s move away from manufacturing to concentrate on distribution, where its annualised revenues amount to more than ú450m. Earlier this year Farnell disposed of its stake in Terrafix (CI No 2,572) and it sold its optical fibre unit to Schott-Glass Ltd last year (CI No 2,490). This sale will be satisfied by the repayment of loans of ú23.2m owed to Farnell and ú56.7m for the share capital of manufacturing companies. The manufacturing division comprises companies including Farnell Power, Farnell Instruments, Farnell Cayson, Kelan Circuits, Farnell Technology, Rendar and Wayne Kerr. It builds low and high voltage power supplies, printed circuit boards, electronic test and measurement instrumentation and rack-mounted standby power systems, among other electronic components. Its headquarters are in the UK where it has five offices, and it has sales outlets in Germany, Hungary, Italy and the US. The division underwent reorganisation recent ly and made an operating profit of ú7.0m from a turnover of ú64.5m in the year to January 29. Farnell intends to concentrate on distribution from now on, in particular the rapid expansion of its electronic components catalogue in major developed economies. Volume shipments will continue to be supplied by Farnell Electronic Services, which was created from two acquisitions in 1991 and 1993. Farnell estimates profits of ú28.4m from the disposal and that corporation tax of ú8.0m will arise, payable in October 1996. Howard Poulson, group chief executive of Farnell Electronics described the sale as a genuine win-win situation and declared himself confident that the manufacturing division will continue to prosper as an independent business.
