Avnet 2002 Annual Report Download - page 19

to the Company's consolidated statements of operations as opposed to being reÖected as opening balance sheet
adjustments recorded as part of purchase accounting.
In May 2001, Avnet acquired Sunrise, a privately held, electronic components distribution company
serving indigenous and multinational OEMs and contract manufacturers in the PRC and Hong Kong. The
acquisition has substantially improved the Company's operations in the PRC and Asia overall and provides an
important strategic foothold for continued expansion into this important region of the world.
In October 2000, the Company completed the acquisition of certain European operations of the VEBA
Electronics Group consisting of (a) the Germany-headquartered EBV Group, including EBV Electronik and
WBC, both pan-European semiconductor distributors, and Atlas Services Europe, a logistics provider for EBV
and WBC; and (b) the Germany-based RKE Systems, a computer products and services distributor. The
amount paid at closing of $740.0 million, subject to the resolution of certain purchase price contingencies,
included the payoÅ of substantially all of the debt on the books of the companies acquired. Subsequent to the
end of 2002, the Company and the seller of the VEBA Electronics Group resolved all 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 $6.5 million. This refunded purchase price will be recorded in the Company's
2003 consolidated statement of operations.
In July 2000, the Company acquired Savoir Technology Group, Inc. (""Savoir''), a leading distributor of
IBM mid-range server products in the Americas. This acquisition has had a material beneÑt to the Company,
especially CM, by contributing substantially to making Avnet one of the largest distributors of IBM Enterprise
products globally. In the Savoir merger, holders of Savoir common stock received 0.11452 of a share of Avnet
common stock for each share of Savoir common stock, and cash in lieu of fractional Avnet shares. The
exchange ratio and the price paid for fractional shares were based upon an Avnet stock price capped at
$34.2736 per share. Holders of Savoir series A preferred shares received 0.16098 of a share of Avnet common
stock for each share they held and cash in lieu of fractional Avnet shares. The total cost of the acquisition of
Savoir including estimated expenses was approximately $145.8 million, consisting of the cost for the Savoir
shares of $111.1 million in Avnet stock and $0.7 million in Avnet stock options (net of related tax beneÑts of
$0.5 million) as well as $1.8 million for transaction expenses and $32.2 million for the payoÅ of pre-existing
Savoir debt. The above dollar value of Avnet stock includes the issuance of 3,736,954 shares of Avnet stock
valued at the assumed price of $29.66 per share.
In October 1999, the Company acquired Marshall Industries (""Marshall''), then one of the world's
largest distributors of electronic components and computer products, for a combination of cash and Avnet
stock. The total cost of the acquisition of Marshall, including estimated expenses, was approximately
$764.6 million, consisting of the cost for the Marshall shares of $326.8 million in cash, $269.3 million in Avnet
stock and $7.0 million in Avnet stock options (net of related tax beneÑts of $4.8 million) as well as
$17.5 million for direct transaction costs and estimated expenses and $144.0 million for the reÑnancing of
Marshall net debt. The above dollar value of Avnet stock reÖects the issuance of 6,817,943 shares of Avnet
stock valued at an assumed price of $39.50 per share.
In October 1999, the Company acquired 94% of the SEI Macro Group, an electronics components
distributor headquartered in the United Kingdom, and 16% of Eurotronics B.V., a pan-European electronics
components distributor headquartered in the Netherlands. In January 2000, the Company completed its
acquisition of the SEI Macro Group and Eurotronics B.V.
Major Products
One of Avnet's competitive strengths is the breadth and quality of the suppliers whose products it
distributes. IBM represents the only supplier from which product sales exceed 10% of the Company's
consolidated sales. During 2002, IBM products accounted for approximately 16% of the Company's sales.
Listed below are the major product categories and the approximate sales in 2002, the percentage of the
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