Avnet 2011 Annual Report Download - page 8

Download and view the complete annual report

Please find page 8 of the 2011 Avnet annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 101

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101

Table of Contents
TS enables VARs to grow faster by helping them understand their customers’
unique business requirements so that they can
tailor a complete IT solution spanning supplier lines and delivering a higher return on investment. Avnet SolutionsPath
®
offers a
proven methodology comprising business analysis and planning, training and enablement, and ongoing support to help partners
quickly and cost effectively attain solution-
selling expertise they can use to develop and deploy an array of data center solutions for
high-growth market segments. Avnet SolutionsPath
®
includes practices dedicated to vertical markets such as healthcare, government,
energy, banking and retail, as well as technology practices focused on virtualization, storage, networking, security, unified
communications, mobility and cloud computing. TS also provides logistics, sales, marketing, financial and technical services,
including engineering support, systems integration and configurations.
In EMEA and Asia/Pacific, TS provides embedded computing solutions including technical design, integration and assembly to
developers of application-specific computing solutions in the non-
PC market. Developers include OEMs targeting the medical,
telecommunications, industrial and digital editing markets. In these regions, TS also provides the latest hard disk drives,
microprocessor, motherboard and DRAM module technologies to manufacturers of general-purpose computers and system builders.
Foreign Operations
As noted in the operating group discussions, Avnet has significant operations in all three major economic regions of the world:
the Americas, EMEA and Asia/Pacific. The percentage of Avnet’s consolidated sales by region is presented in the following table:
Avnet’s foreign operations are subject to a variety of risks. These risks are discussed further under Risk Factors
in Item 1A and
under Quantitative and Qualitative Disclosures About Market Risk
in Item 7A of this Report. Additionally, the specific translation
impacts of foreign currency fluctuations, most notably the Euro, on the Company’
s consolidated financial statements are further
discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Report.
Acquisitions
Avnet has historically pursued a strategic acquisition program to grow its geographic and market coverage in world markets for
electronic components and computer products and solutions. This program was a significant factor in Avnet becoming one of the
largest industrial distributors of such products and services worldwide. Avnet expects to continue to pursue strategic acquisitions as
part of its overall growth strategy, with its focus likely directed primarily at smaller targets in markets where the Company is seeking
to expand its market presence, increase its scale and scope and/or increase its product or service offerings.
During fiscal 2011, the Company completed seven acquisitions, the most significant of which was the acquisition of Bell
Microproducts Inc. (“Bell”), a value-
added distributor of storage and server products and solutions and computer components
products, providing integration and support services to OEMs, VARs, system builders and end users in the U.S., Canada, EMEA and
Latin America. Bell operated both a distribution and single tier reseller business and generated sales of approximately $3.0 billion in
calendar 2009, of which 42%, 41% and 17% was generated in North America, EMEA and Latin America, respectively. The
consideration for the transaction totaled $255 million for the equity of Bell which consisted of $7.00 in cash for each share of Bell
common stock outstanding, cash payment for Bell equity awards, and cash payments required under existing Bell change of control
agreements, plus the assumption of $323 million of Bell net debt. Of the debt acquired, Avnet repaid approximately $210 million of
debt (including associated fees) immediately after closing. As of the end of fiscal 2011, the Company has completed the integration of
Bell into both the EM and TS operating groups and expects the full impact of the cost synergies to be realized in the first quarter of
fiscal 2012.
5
Percentage of Sales for Fiscal Year
Region
2011
2010
2009
Americas
43
%
44
%
47
%
EMEA
32
31
32
Asia/Pac
25
25
21
100
%
100
%
100
%