Press release
Phoenix, Arizona, October 10, 2008 -- Avnet, Inc. (NYSE:AVT) announced today that it plans to acquire Abacus Group PLC (Abacus), through one of its wholly owned subsidiaries, in an all cash offer for £0.55 per share, which equates to an equity value of approximately £42.2 million ($73.0 million) and a transaction value of £105.1 million ($181.8 million) assuming a net debt position for Abacus of £62.9 million ($108.8 million) as of March 31 2008. Founded in 1972, Abacus, with sales of £287 million ($497 million) for its fiscal year ended September 2007, is a leading value-added distributor of electronic components serving customers in 10 countries across Europe. The transaction, which is subject to the completion of a tender offer and EU merger control clearance, is expected to close early in calendar 2009.
In compliance with the UK Takeover Code, Avnet has 28 days to mail to Abacus shareholders an offer document which sets out in full the terms and conditions of the offer. The Board of Abacus Group is recommending the offer and Avnet has already received irrevocable commitments to accept the offer from Abacus' Directors and certain other shareholders representing over 30% of the issued shares. The transaction is expected to be immediately accretive and benefit Avnet's next fiscal year earnings by approximately $0.10 to $0.15 per share, excluding integration charges.
Roy Vallee, Avnet's chairman and chief executive officer, commented, "This acquisition of Abacus represents an excellent complement to our Electronics Marketing group in EMEA. With a respected management team, talented associates and a substantial number of new customers, Abacus provides Avnet with exciting growth opportunities in the region. Our financial strength affords us the opportunity to acquire excellent companies like Abacus despite current conditions in the credit markets. Using conservative business case assumptions, we believe that we will achieve our stated return on capital targets following the completion of the integration."
Abacus has a portfolio of 180 supplier franchises covering semiconductor, interconnect, passive and electromechanical (IP&E) devices. In addition to electronic components distribution, Abacus Embedded Systems Group provides specialty distribution of displays, embedded computer and wireless communication products while its Alpha 3 segment offers electromechanical value-added sub-assembly services.
