IT Mergers & Acquisitions

Avnet, Inc. and MRA Systems, Inc., a subsidiary of General Electric Company, announced today that they have reached a definitive agreement for Avnet to acquire Access Distribution, a General Electric company and leading value-added distributor of complex computing solutions for $412,5 million in cash, subject to adjustments based upon net book value at closing. It is anticipated that the transaction, which is subject to normal regulatory approvals, will close by the end of calendar 2006.

Projected sales for Access Distribution are expected to be greater than $2 billion in calendar 2006, with roughly 90% coming from the Americas and the remainder from Europe. Access Distribution markets a portfolio of technology products highly complementary to Avnet’s existing offerings and will be integrated into Avnet’s Technology Solutions Group (TS). Upon completion of the acquisition, TS will have an expanded line card of complementary products and will now generate revenues from more than 35 countries.

Roy Vallee, Avnet’s Chairman and Chief Executive Officer, commented, “Access’ deep-rooted relationships with Sun Microsystems and its extensive value-added reseller base provides a strong complement to Avnet’s existing partnerships. We will maintain the focus on Sun Microsystems through a separate business unit with dedicated resources, similar to how we operate with IBM and HP. We plan to fund the transaction with existing liquidity and our preliminary estimate of expense synergies is approximately $15 million. The transaction is expected to be immediately accretive and should add approximately $0.20 to EPS in calendar 2007 while supporting the attainment of Avnet’s return on capital employed target of 12.5 percent.”