I reckon Avnet got a good deal when it acquired the UK-based Abacus Group earlier this year.
Some pundits felt the US giant overpaid at 55p a share when the share price was lingering at 20p. What Avnet spotted were inherent strengths within Abacus which can potentially bring big benefits.
Abacus was as Graham McBeth, former managing director and now president of Avnet Abacus, observed, "A decent business."
Specifically it was an acknowledged top class IP&E distributor across Europe, and it had the savvy to jump in early to create a separate business to serve the growing embedded systems market.
These were the business which jumped out for Avnet, and the acquisition was almost an acknowledgment that Avnet was not performing as it should be in these two key sectors.
To be fair the embedded business within Avnet is a fledgling, launched just last year at the Embedded Systems Show in Nuremberg and confined territorially at launch to Italy and Germany. The newly-minted Avnet Embedded will fly on Abacus's strong European presence encompassing all the major European regions. Martin Brooks, the company's vice president has assembled a strong team taking the best from Abacus and Avnet. Abacus brings a tasty technical team and laboratories in four countries to provide technical support to customers.
Avnet Time has been around the European IP&E business for many a year. Launched amid a blizzard of franchise announcements - I know because I was caught in this blizzard - it has perhaps not had the long-term impact Avnet would have been wanting. It sits number two behind Arrow, and Graham McBeth is clear he is after that number one spot.
He too has a top dollar management crew. Alan Jermyn and Nigel Ward, both Abacus men, are hardened IP&E veterans who played a major role in shaping the Abacus European IP&E business; Its success is clear from the big name suppliers attracted to the line card. Add the stellar names in the Avnet Time portfolio and this is a powerful business. More so when you consider the customer base which covers the distribution pyramid from top OEMs and CEMs to Abacus's heartland SME customers.
Patrick Zammit, president of Avnet Electronics Marketing EMEA nails it. "The two businesses are a perfect fit stragically and culturally."
Not much doubt in my mind Avnet has considerably strengthened its European businesses today.
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