Avnet to be number one?
By JAMES CARBONE -- Purchasing, 8/12/1999 2:00:00 AM
Avnet's acquisition of rival Marshall Industries could propel the perennially number-two distributor to the top spot in electronics distribution in North America.
If the acquisition had occurred in 1998, Avnet would have been the number-one electronics distributor. In 1998, Arrow had calendar-year sales of $5.35 billion in North America. Avnet had sales of $4.82 billion and Marshall, $1.71 for combined North American calendar-year sales of $6.53 billion.
Avnet is acquiring Marshall in a 50% cash and 50% stock merger transaction, which has a market value of about $830 million. The acquisition has been approved by the board of directors of both companies, and is subject to the approval of the shareholders government regulatory bodies. The transaction is expected to close in late September.
Marshall will be merged into Avnet's Electronics Marketing business unit to create the largest electronic components distribution enterprise in the Americas. Avnet's Electronics Marketing Americas will be comprised of Avnet/Marshall, serving the components distribution market, along with Avnet Integrated Material Services, addressing supply chain management, and Avnet Design Services, providing engineering services. The units will report to Steve Church, president of Avnet's Electronics Marketing Americas.
"The combination of the Avnet and Marshall line cards will create the single best product offering in our industry, including a leadership position in the majority of Asian product lines," says Church.
Rob Rodin, president and CEO of Marshall, will become president of Global Strategic Business Development, and will be involved in supply chain management, engineering design services, and e-commerce business ventures. He will report to Roy Vallee, chief executive officer and chairman of the board of Avnet.
The impact on purchasers remains to be seen. Obviously the merger means less competition. It also means more one-stop buying because each distributor has lines that the other doesn't carry.
Buyers who are interested in doing business via the Internet can expect Avnet to dominate electronic commerce with the acquisition. "We are one-two in electronic commerce, and we see customers moving in that direction," says Church. "They want real-time information seven by twenty-four (seven days/week, 24 hours/day)."
Marshall was the first electronics distributor on the Internet and is regarded as distribution's leader in electronic commerce via the Internet.
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