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Avnet offered £1.85 in cash for each Premier Farnell share in a recommended deal announced on 28 July 2016. The offer valued Premier Farnell’s equity at approximately £691 million, and the acquisition completed on 17 October 2016.
What was Avnet’s offer for Premier Farnell?
Avnet and Premier Farnell announced a recommended all-cash scheme of arrangement on 28 July 2016. Avnet agreed to pay £1.85 for each Premier Farnell share, implying an equity value of approximately £691 million. The companies’ Rule 2.7 announcement also gave an implied enterprise value of £868 million, a separate measure that includes debt and other adjustments.
The price was 12.1% above Datwyler’s £1.65-per-share proposal, announced on 14 June 2016. Compared with Premier Farnell’s closing share price on 13 June—the reference date used for the calculation—the Avnet offer represented a 69.3% premium. These are different comparisons: one is against a competing bid and the other against the unaffected market price. Avnet’s offer announcement and the Rule 2.7 announcement set out the terms.
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Combining distribution with design support
Avnet described the deal as a way to connect its large-volume broadline distribution and supply-chain capabilities with Premier Farnell’s support for proof-of-concept work and electronic-system design. The intended customer journey ran from early prototyping through production at scale.
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At completion, Avnet CEO William Amelio said the combination could provide “end-to-end solutions” to help customers move products from prototype to volume production. Avnet’s initial announcement also emphasized Premier Farnell’s online services, presenting them alongside Avnet’s supply chain as a way to strengthen its digital offering worldwide. These statements describe Avnet’s strategic rationale, not a measured outcome of the acquisition.
Avnet’s expected synergies
Avnet projected approximately $70 million to $80 million in annual synergies after integration. This was a forward-looking estimate in 2016, not a reported saving or a guarantee that the target would be achieved.
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When did the deal close, and what approvals did it require?
The offer was conditional on shareholder, court and regulatory approvals. On 6 October 2016, the European Commission recorded the transaction as a public bid through which Avnet would acquire sole control of Premier Farnell. It noted that the companies’ combined worldwide turnover exceeded €5 billion, with Avnet’s turnover reported at €25.169 billion and Premier Farnell’s at €1.243 billion.
Avnet announced completion on 17 October 2016. The shareholder vote had approved the transaction with 99.9% of votes cast in favor. Avnet said Premier Farnell shares were acquired for £1.85 each and that the company was integrated into Avnet.
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How to interpret the deal’s headline figures
The figures answer different questions, so they should not be treated as interchangeable:
- £1.85 per share: the cash consideration for each Premier Farnell share.
- Approximately £691 million: the implied value of Premier Farnell’s equity.
- £868 million: the implied enterprise value stated in the offer announcement.
- 12.1% premium: the offer’s premium over Datwyler’s £1.65 proposal.
- 69.3% premium: the offer’s premium over Premier Farnell’s 13 June 2016 closing price.
For comparisons with other acquisitions, distinguish the per-share cash price and premium from the total equity or enterprise value. Also consider the conditions attached to the offer, the strategic fit described by the buyer and any synergies stated as expectations rather than achieved results.
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