Avnet 2003 Annual Report Download - page 18
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Please find page 18 of the 2003 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.regularly as part of Avnet's treasury and cash management operations. These risks are discussed further at
""Quantitative and Qualitative Disclosures About Market Risk'' appearing in Item 7A of this Report.
Additionally, discussion of speciÑc impacts of foreign currency Öuctuations, most notably the Euro, on the
Company's consolidated Ñnancial statements are further discussed in ""Management's Discussion and Analysis
of Financial Condition and Results of Operations'' appearing in Item 7 of this Report.
SigniÑcant Acquisitions
Avnet made no signiÑcant acquisitions during 2003 or 2002. Avnet has historically pursued a strategic
acquisition program to grow its presence in world markets for electronic components and computer products.
This growth strategy was a signiÑcant factor in Avnet becoming one of the largest industrial distributors of
electronic components and computer equipment worldwide. Having achieved this scale, management has
focused in the Company's most recent two Ñscal years on its existing lines of business and strategies to help
those businesses grow organically. For instance, since the acquisition of Sunrise Technology Ltd. in 2001,
Avnet has continued to establish an infrastructure throughout the Asia/PaciÑc region to accommodate the
signiÑcant growth in this part of the world. Largely as a result of these eÅorts, sales in this region have
increased from $556.4 million in 2000 to $1.02 billion in 2003. Further, the limited number of acquisition
targets has changed the focus of the Company's acquisition strategy to a relatively smaller scale, which would
likely be directed at geographies where the Company is seeking to increase its scale and scope if any
acquisition targets are pursued. Management currently does not anticipate making any material acquisitions in
the near term.
During the last three years, the Company has completed six acquisitions Ì two in North America, two in
Europe, one in the Asia/PaciÑc region and one in the Middle East Ì as highlighted in the table below:
Sales
Acquisition Date Acquired Company Base of Operations (Millions)(A)
March 2002 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Gamma Optronik AB France $ 8
June 2001 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Kent Electronics Corporation North America 942
May 2001ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Sunrise Technology Ltd. China 230
February 2001 ÏÏÏÏÏÏÏÏÏÏÏÏÏ RDT Technologies Ltd. Israel 90
October 2000ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ VEBA Electronics Group Germany 1,800
July 2000 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Savoir Technology Group, Inc. North America 767
(A) Represents the acquired company's approximate sales in its most recent Ñscal year prior to its acquisition
by Avnet.
During 2001, the Company acquired a number of businesses that had a substantial positive impact on the
sales and scale of operations of the Company. In addition to enhanced scale, as discussed above, another goal
of the Company's acquisition strategy is to recognize certain cost savings once the acquired company is
merged with Avnet. In order to achieve such cost savings, certain reduction eÅorts often must take place in the
form of headcount reductions, facility consolidation and other reorganization eÅorts. See ""Restructuring and
Other Charges'' appearing in Item 7 of this Report for further discussion of the Company's restructuring
eÅorts, including those associated with recent acquisitions. Below is a discussion of the Company's signiÑcant
acquisitions (those acquisitions where the acquired company had sales in excess of $150 million in its most
recent Ñscal year prior to acquisition). With the exception of the acquisition of Kent Electronics Corporation
(""Kent''), all of the acquisitions discussed below were accounted for using the purchase method of
accounting.
On June 8, 2001, Avnet completed its acquisition of Kent, a specialty distributor and network integrator,
following approval of the Amended and Restated Merger Agreement and Plan of Merger dated as of
March 21, 2001 (the ""Merger Agreement'') by Avnet and Kent shareholders on June 6, 2001. Pursuant to the
Merger Agreement, Kent was merged into Avnet and its separate existence ceased. Kent shareholders
received 0.87 of a share of Avnet common stock for each share of Kent common stock held, with cash paid in
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