Fortune 500 firm outbids rival with £691m deal for Leeds company

X The Business Desk

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A MULTI-BILLION dollar US corporation is set to takeover Leeds-based electronics manufacturer Premier Farnell after outbidding a European rival.

Avnet, which last year turned over US$27.9bn has acquired the business in a deal worth a £691m, giving Premier Farnell a market capitalisation of £868m.

In June it was reported that Swiss manufacturing company Datwyler was set to acquire the business in a deal which would value Premier Farnell at £792m.

However following the announcement of the Datwyler offer, Avnet approached the business. Premier Farnell directors have now withdrawn their recommendation of the Datwyler offer.

Avnet, distributors of electronic components, computer and IT solutions, was  founded in 1921 and is headquartered in Phoenix, Arizona.

As of 27 July 2016, Avnet’s market capitalisation was approximately $5.2bn.

It said that the acquisition of Premier Farnell would enhance its digital capabilities, with Bill Amelio, Avnet’s interim chief executive officer saying: “This acquisition will significantly strengthen Avnet’s digital footprint worldwide.

“The convergence of Premier Farnell’s innovative online services with Avnet’s world class supply chain will create customer service unparalleled in the industry. The talented team of people at Premier Farnell will allow Avnet to enhance our customer experience and accelerate our global growth.”

Valerie Gooding, the chairman of Premier Farnell (pictured right) said: “The Board of Premier Farnell is pleased to recommend Avnet’s cash offer for the Group which is at a 12.1% premium to the Datwyler proposal and provides our shareholders with significant value in cash for their shares. Val Gooding / Premier Farnell

“The combination of Premier Farnell and Avnet would create a leading high-service global electronic components distributor and represents a strong strategic fit. Both companies are highly complementary in terms of product range, distribution channels and geographic footprint.”

Premier Farnell is an 80 year-old manufacturer employing 3,600 people across its operations. It is known for manufacturing the Raspberry Pi computer.

In its Q1 results, Premier Farnell reported revenues of £247.2m, up from £240.m in the same period the year before, though the company has been suffering “challenging trading conditions” in North America which affected its bottom line in March 2016.

Applications will be made to the London Stock Exchange to cancel trading in Premier Farnell shares.