Avnet announced recently it had entered into an agreement to acquire Bell Microproducts for $7 per share plus the assumption of debt, although some of Bell's shareholders have questioned whether or not $7 per share is a fair price after a recent upbeat earnings report in which sequential sales were up 9 percent.
The price-per-share amounts to approximately $252 million, and Bell's debt position on December 31 was $342 million, according to Avent when it announced the agreement in late March. Avnet stated the acquisition had been approved by both boards of directors.
Bell's founder and CEO Don Bell stated, "This transaction delivers excellent value to our shareholders while providing an enhanced platform from which our employees can continue Bell's heritage of helping suppliers reach our served markets with increasingly complex solutions. Given the rising demands of global technology markets, the investment required to deliver leading-edge technical support and competitive supply-chain networks continues to grow. Avnet's financial resources and global infrastructure will allow the Bell organization to deliver industry-leading value to our customers and continue our long history of growth and market share gains."
Bell's strengths have been in the data center and embedded-systems spaces. Avnet's chairman and CEO Roy Vallee said when the merger was announced, "Bell's position in data center products and embedded systems complements Avnet's current strategies and creates opportunities for cross selling. Bell's position as one of the leaders in hard disk drive distribution substantially increases Avnet's exposure to this product segment, which is currently focused on embedded computing. In support of our focus on value-added solutions distribution in North America, we intend to explore strategic alternatives for the single tier reseller business." He also said the acquisition will increase Avnet's presence in Latin America, a fast-growing market.
