Avnet Inc. (Phoenix, AZ) and Kent Electronics Corp. (Houston, TX) announced that they have reached an agreement for Avnet to acquire Kent in a stock-for-stock merger valued at approximately $550 million, including approximately $50 million of cash currently on the books of Kent in excess of debt assumed.
Under the terms of the agreement, Kent shareholders will receive 0.87 of a share of Avnet for each share of Kent on a tax-free basis. The merger has been approved by the boards of directors of both companies and is subject to the approval of the shareholders of both companies as well as customary regulatory approvals. The transaction is expected to be accounted for as a pooling-of-interests and to be completed within the next 90 days.
Roy Vallee, Avnet's chairman and CEO, commented, “We have long admired Kent's talented employees and their ability to profitably build its market share in the distribution of interconnect, passive and electromechanical (IP&E) components. By combining Kent's electronic components operation, which has annualized sales of over $500 million, with Avnet's electronics marketing group's domestic IP&E business, we will create the largest specialty components distributor of its kind in North America. This new $1.6 billion division will be highly focused and able to provide IP&E products and value-added services to a broad North American customer base."
Morrie Abramson, Kent's chairman and co-founder, stated, “I believe that Avnet will be an excellent partner for Kent, supporting the growth that we have achieved to date and enabling us to increase customer penetration through Avnet's global organization, broad range of product offerings and supply chain management capabilities. Equally important, we are confident that our corporate cultures are compatible."
