Avnet 2002 Annual Report Download - page 63

AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
Inc. (collectively known as the ""Orange Coast Companies'' and counted as a single acquisition), Advacom,
Inc. and Sabre-Data, Inc. (the Orange Coast Companies, Advacom and Sabre-Data were acquired by Kent
prior to its acquisition by Avnet).
The acquisition of Gamma Optronik AB, as well as certain contingent purchase price payments
associated with businesses acquired in prior Ñscal years (principally, Sunrise Technology Ltd., RDT
Technologies Ltd., PCD Italia S.r.l. and Matica S.p.A. and Savoir Technology Group, Inc.) and the
acquisition of the remaining 20% interest in Kopp Electronics Limited, required a total investment of
$31,547,000 (net of $1,462,000 of cash on the books of the acquired company), all of which was paid in cash.
Gamma Optronik AB had sales totaling approximately $7,534,000 during its Ñscal year immediately preceding
its acquisition. The historical results of operations of the acquired company would not have had a material
eÅect on the Company's consolidated results of operations and therefore no unaudited pro forma results are
presented herein.
The purchase price for the acquisition of Gamma Optronik AB, accounted for as a purchase, has been
allocated, on a preliminary basis, to the assets acquired and liabilities assumed based upon estimated fair
values as of the acquisition date and are subject to adjustment when additional information concerning asset
and liability valuations are Ñnalized.
Excluding the acquisition of Kent (which was accounted for as a ""pooling-of-interests''), the acquisitions
completed during 2001 required a total investment of $866,268,000 (net of $74,423,000 of cash on the books
of the companies acquired), of which $779,788,000 was paid in cash (excluding $32,200,000 to pay oÅ pre-
existing debt), $111,065,000 was paid in Avnet stock and $714,000 was paid in Avnet stock options (net of
related tax beneÑts of $454,000), less a receivable of $25,299,000 for income tax credits related to the
acquisition of the VEBA Group. In addition, the Company paid $79,063,000 of Kent acquisition-related costs,
consisting primarily of change-in-control and other executive beneÑt-related payments and professional fees
for investment banking, legal and accounting services rendered to both Avnet and Kent. In the aggregate, the
operations acquired during 2001, excluding Kent, had sales totaling approximately $2,887,000,000 during the
Ñscal year of each such operation immediately preceding its acquisition. The historical results of operations of
the companies other than Kent that were acquired during 2001 would not have had a material eÅect on the
Company's results of operations and therefore no unaudited pro forma results are presented herein. The
Company also sold certain small non-core operations during 2001, the impact of which was not material.
Subsequent to 2002, the Company and the seller of the VEBA Group resolved certain remaining
purchase price contingencies related to this acquisition, resulting in a refund to Avnet of a portion of the
amount paid at closing totaling approximately $6,486,000. This refunded purchase price will be recorded in the
Company's 2003 consolidated statement of operations.
As discussed in Note 1, the accompanying consolidated Ñnancial statements and notes have been restated
to reÖect the acquisition of Kent, which was accounted for as a ""pooling-of-interests.'' Each share of Kent
common stock was converted into 0.87 shares of Avnet common stock. A total of approximately 25.3 million
Avnet common shares were issued for the outstanding stock of Kent and an additional 1.7 million shares have
been reserved for issuance upon the exercise of outstanding warrants and stock options assumed in the
transaction.
Kent's results of operations for the period from July 1, 2000 to June 8, 2001 and for its Ñscal year ended
April 1, 2000 have been combined with Avnet's results of operations for the years ended June 29, 2001 and
June 30, 2000, respectively. In addition, Kent's balance sheet as of April 1, 2000 has been combined with
Avnet's balance sheet as of June 30, 2000. Therefore, an adjustment was made to retained earnings to include
$8,819,000 of net income for Kent for the three months ended June 30, 2000 as these earnings were not
included in any of the statements of operations otherwise presented. For the same three months, Kent's sales
of $223,313,000 and Kent's cash Öows (used for) provided from operating, Ñnancing and investing activities of
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