Avnet 2003 Annual Report Download - page 19
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Please find page 19 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.lieu of any fractional shares based on $25.84 per Avnet share. Avnet issued approximately 25.3 million shares
of its common stock to Kent shareholders and an additional 1.7 million shares were reserved for issuance upon
the exercise of outstanding warrants and stock options assumed in the transaction.
The accompanying consolidated Ñnancial statements and notes for years prior to 2002 have been restated
to reÖect the acquisition of Kent, which has been accounted for as a ""pooling-of-interests.'' The periods
combined are more fully discussed in Note 2 to the consolidated Ñnancial statements appearing in Item 15 of
this Report. As discussed in Item 7 of this Report and in the notes to the consolidated Ñnancial statements, the
Company recorded certain charges in the fourth quarters of 2002 and 2001, a signiÑcant portion of which
resulted from the Kent acquisition being accounted for as a ""pooling-of-interests.'' Thus, these charges were
recorded 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
Sunrise acquisition has substantially strengthened the Company's operations in the PRC and Asia overall and
provides an important strategic foothold for continued expansion in 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. During 2003, 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.
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 beneÑted the Company, particularly
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. 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.
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 sales exceed 10% of the Company's consolidated
sales. During 2003, IBM products accounted for approximately 17.5% of the Company's sales. Listed in the
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