UK distribution company, Electrocomponents Plc has broken into the US market with the $380m acquisition of Avnet Inc’s Allied Electronics Inc subsidiary, a Fort Worth, Texas-based distributor of electric and electronic products. As part of the deal, Electrocomponents and Avnet have entered into a strategic alliance whereby Avnet will use its supply chain to deliver products to Electrocomponents.
After expanding out of its UK base to other parts of Europe and Japan, Electrocomponents has been looking to break into the US, a highly fragmented market with over 1,000 distributors battling for an electronic components market worth around $16bn. Allied Electronics is one of four catalog distributors operating on a national basis and Electrocomponents says it has a similar business model to its own.
In its results for the year to March 31, Electrocomponents net profit declined 5.2% to 76.4m pounds ($123m) on revenue 2.2% higher at 677.1m pounds ($1bn). The company blames heavy investment in internet trading and starting up in Japan at a time of Far Eastern turmoil, less-than-buoyant European economies and recession in the UK.
