Great call on Marshall Industries!!!
Avnet to Acquire Marshall Industries in Largest Electronics Distribution Merger Ever
Business Wire - June 28, 1999 09:27
PHOENIX--(BUSINESS WIRE)--June 28, 1999--Roy Vallee, Chairman and Chief Executive Officer of Avnet, Inc. (NYSE:AVT), announced today that Avnet has agreed to acquire Marshall Industries (NYSE:MI) in a 50% cash and 50% stock merger transaction. Marshall shareholders will be able to elect to receive either $39 in cash or .81569 shares of Avnet common stock (based upon the closing price for Avnet common stock on June 25, 1999) subject to adjustment based upon the average price of Avnet's common stock during a twenty-day period prior to the closing and also subject to proration if more than 50% cash or stock in the aggregate is elected. The transaction, including the assumption of debt, has an indicated market value of approximately $830 million.
The acquisition has been approved by the Boards of Directors of both companies and is subject to the approval of the shareholders of both Avnet and Marshall as well as to regulatory approvals. Donaldson, Lufkin & Jenrette Securities Corporation acted as financial advisor to Marshall and Merrill Lynch served as a financial advisor to Avnet. The transaction is expected to close in about three months.
Marshall Industries had sales of $1.7 billion in its fiscal year ended May 31, 1999. Avnet, one of the world's largest industrial distributors of electronic components and computer products, is expected to have sales in excess of $6.3 billion during its fiscal year to end on July 2, 1999.
Mr. Vallee said, "Marshall Industries, including its wholly-owned subsidiary Sterling Electronics, will be merged into Avnet's Electronics Marketing business unit to create the largest electronic components distribution enterprise in the Americas and the most experienced and knowledgeable sales, marketing and technical services organization in our industry. This combination brings together two recognized leaders in the use of information technology and will allow Avnet to benefit from Marshall's outstanding leadership position in electronic business and electronic commerce." Mr. Vallee also stated, "Based upon a conservative estimate of synergies resulting from the combination of the businesses, the transaction is expected to be accretive to Avnet's earnings per share in the twelve-month period following the merger." He added, "The resulting economies of scale provide a strategic differentiator for Avnet to meet the competitive challenges facing our industry well into the future.
Gordon Marshall, Chairman and Founder of Marshall, and one of the pioneers of the electronic components distribution industry, said, "I am proud of the legacy of Marshall Industries and am extremely pleased for our shareholders, employees, customers and suppliers that we have found such an excellent partner in Avnet. I am confident that the combination of our two companies will create a world class organization capable of leading the industry into the next millennium."
Mr. Vallee further stated, "Following the merger, Avnet's Electronics Marketing Americas will be comprised of Avnet/Marshall, serving the traditional electronic components distribution market, along with Avnet Integrated Material Services, addressing supply chain management, and Avnet Design Services, providing engineering services, all reporting to Steve Church, President of Avnet's Electronics Marketing Americas."
Mr. Church said, "The combination of the Avnet, Marshall and Sterling line cards will create the single best product offering in our industry, including a leadership position in the majority of Asian product lines."
Robert Rodin, President and CEO of Marshall, stated, "I strongly believe that all of our business partners will benefit from this powerful combination. This will create an excellent opportunity for our collective employees to deliver the value required to meet the twenty-first century challenges of global customer service." Mr. Vallee indicated that Mr. Rodin will assume the newly created position of President of Global Strategic Business Development, with involvement in supply chain management, engineering design services and e-commerce business ventures, and will become Co-President joining Steve Church and Brian Hilton in the Office of the President of Global Electronics Marketing reporting directly to Mr. Vallee. Mr. Rodin will also serve on Avnet's Board of Directors as an advisory member and will serve on Avnet's Management Board.
As part of the acquisition of Marshall, Avnet will assume a 16% ownership interest in Eurotronics BV, a Netherlands-based pan-European electronic components distributor. Mr. Vallee also announced that Avnet has made an offer to purchase the remaining 84% of Eurotronics and is in discussions with Sonepar Electronique International in that regard.
Headquartered in Phoenix, Arizona, Avnet, Inc. is a Fortune 500 company with annual sales exceeding $6.3 billion. With sales in 59 countries, Avnet markets, inventories and adds value to the products of the most prestigious electronic components and computer products manufacturers for customers worldwide.
CONTACT: Avnet, Inc.
John Cole, 602/643-7291 (Controller)
john.cole@avnet.com
or
Raymond Sadowski, 602/643-7291 (SVP & CFO)
avnet.com |
