Avnet to Acquire Access Distribution

It is anticipated that the transaction, which is subject to normal regulatory approvals, will close by the end of calendar 2006. Projected sales for Access Distribution are expected to be greater than $2 billion in calendar 2006, with roughly 90 percent coming from the Americas and the remainder from Europe. Through approximately 600 people worldwide, Access provides innovative solutions to increase its partners' profitability and create competitive advantage. Access Distribution markets a portfolio of technology products highly complementary to Avnet's existing offerings and will be integrated into Avnet's Technology Solutions Group (TS). Upon completion of the acquisition, TS will have an expanded line card of complementary products and will now generate revenues from more than 35 countries. Roy Vallee, Avnet's Chairman and Chief Executive Officer, commented, 'Access' deep-rooted relationships with Sun Microsystems and its extensive value-added reseller base provides a strong complement to Avnet's existing partnerships. As a well-respected IT distributor with valuable franchises, strong technical capabilities and talented people, Access represents an excellent strategic fit. In addition to delivering more value to both companies' customers and suppliers, we believe the combination creates significant value for Avnet shareholders.' 'We are excited about the benefits this relationship will bring to our customers, vendors and, of course, employees,' said Anna McDermott, president and chief executive officer, Access Distribution. 'The combined expertise of both organizations will enable us to continue to grow and expand our business and offer tremendous value to the market.' Mr. Vallee added, 'We will maintain the focus on Sun Microsystems through a separate business unit with dedicated resources, similar to how we operate with IBM and HP. We plan to fund the transaction with existing liquidity and our preliminary estimate of expense synergies is approximately $15 million. The transaction is expected to be immediately accretive and should add approximately $0.20 to EPS in calendar 2007 while supporting the attainment of Avnet's return on capital employed target of 12.5 percent.' Banc of America Securities LLC acted as financial advisor and Gibson, Dunn & Crutcher LLP acted as legal counsel to Avnet in connection with this transaction.