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Bids, Mergers and Takeovers

Datwyler bid for Premier Farnell recommended

14 June 2016 09:31

Datwyler Technical Components UK Ltd, a subsidiary of Datwyler Holding AG, has made a recommended 165p-a-share cash bid for Premier Farnell. The cash consideration implied an enterprise value of £792m.

In addition, Premier shareholders on the register on May 27 would remain entitled to receive the FY proposed final dividend of 3.6p a share cash.

The combined group would operate a global Technical Components division with approximately 4900 employees, more than 1m products stocked in warehouses and was expected to generate revenue of about CHF1.8bn.

"Datwyler believes the combination of Datwyler and Premier Farnell represents a strong strategic fit and is highly attractive," it said in a statement.

"Both companies share very similar strategic values and are highly complementary in terms of product range, distribution channels and geographic footprint.

"The Transaction creates a leading high-service electronic components distributor in Europe and the combined platform will enable the Combined Group to realise significant economies of scale compared to Datwyler's standalone strategy, particularly in the context of a large addressable and fragmented high-service electronic components sector worth approximately CHF30-40 billion, in which the top five distributors have a sector share of little over 15 per cent.

"Complemented by efficiency gains from an overlapping cost base, increased capillarity and acceleration of ongoing restructuring efforts on both sides, the Combined Group is also expected to deliver enhanced margins through a low cost structure going forward."

At 9:31am:

(LON:PFL) Premier Farnell PLC share price was +54.63p at 163.88p

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