Ten Years On From The Great Veba Sell Off

It is now 10 years almost to the day since the biggest carve-up of distribution assets the channel has ever seen and is ever likely to see.

The deal also featured an unlikely to be repeated collaboration between Arrow and Avnet.

Some background first for either callow distribution inmates or the old ‘uns (like me) whose memory plays up from time to time.

Veba Electronics was owned by German industrial conglomerate Raab Karcher which decided to get into the component distribution business. It snapped up the UK’s Memec, the pioneer of technical distribution, EBV Elektronik, the classy German semiconductor specialist and the US-based Wyle Components and Wyle Systems.

Well I can tell you now history is littered with industry outsiders who were lured into distribution when it enjoyed very healthy margins. Trouble is they seemed unaware of the downturns. Thus Coats Paton (owners of the Jaeger clothing brand) and Lex (the car leasing company) to give two examples came and went.

When Veba decided to exit stage left its assets were split three ways. Avnet acquired the European businesses - EBV, WBC, a smaller semiconductor specialist subsidiary of EBV, logistics company Atlas Services and Raab Karcher Electronic Systems. Arrow took the two Wyle businesses, and the US Atlas Services business. Memec was effectively sold to Schroder Ventures, a London-based venture capital company which included all the Memec UK companies. The year before Memec had streamlined its operations into three divisions, Unique Technologies, Impact Electronics and Insight Electronics, both in the UK and the US and these along with a sliver Atlas Services in the US.

The whole deal topped $2.35bn, numbers we are unlikely to see again in the channel.

To great hurrahs Memec regained its independence, Xilinx and Linear Technology wanted their old Memec back. As one supplier in an interview with Electronics Weekly’s David Manners commented, “We depend for demand creation on Memec and Dick Skipworth has perfected that best in Europe.”

Of the three which has survived best? Well you’d have to say EBV which has retained its brand and position from within the Avnet Group. Memec, albeit with the Avnet monicker in front of its name is now flourishing again after its acquisition by Avnet in 2005. The Wyle Electronics name has disappeared into Arrow.