Avnet Acquires Taiwanese Distributor

In an effort to strengthen its position in Asia, Avnet, Inc. (AVT - Analyst Report) recently acquired distributor J.C. Tally Trading Co., Ltd and its affiliate Shanghai FR International Trading. With operations in Taiwan and China, Avnet distributes interconnect, passive and electromechanical components.

Based in Phoenix, AZ, Avnet Inc. is one of the world’s largest distributors of electronic components and computer products. Avnet operates in two segments—the Electronics Marketing (EM) Group and the Technology Solutions (TS) Group.

J.C. Tally generated revenue of approximately $90 million in 2010. The company currently employs 140 people serving a broad base of customers from eight locations across Taiwan and China. Avnet Electronics Marketing Asia expects to expand its position as the number one IP&E distributor in the fast growing Asian region.

J.C. Tally will be integrated into the operations of Avnet Electronics Marketing Asia. Management stated that the IP&E market in Asia is highly fragmented and this acquisition provides another opportunity to Avnet to accelerate growth in the region by adding new suppliers and customers.

The transaction is expected to be immediately accretive to the bottom-line. Earlier, in July, Avnet acquired value-added IT distributor Amosdec SAS. Headquartered in Paris, Amosdec provides virtualization and storage management solutions.

Amosdec generated revenues of $90 million in fiscal 2010. Management expects that the acquisition will be immediately accretive to the bottom-line and support Avnet to attain a return on capital of 12.5% within two years.

Amosdec will form a part of Avnet Technology Solutions, EMEA. Amosdec is recognized for its expertise in VMware virtualization technology and for its leadership in introducing new VMware ecosystem solutions in France.

Franceis EMEA’s third largest IT market. Avnet will expand its footprint in Europe by leveraging its strength in data center and Amosdec’s position in software and services. Further, the company expects to provide new business opportunities with integrated and cost-effective solutions to its partners.

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