14th Jun 2016 06:43
LONDON (Alliance News) - Premier Farnell PLC said Tuesday it agreed to a takeover offer from Swiss manufacturing company Datwyler Holding AG, in an all-cash deal that values the London-listed company at GBP615 million.
Datwyler has agreed to buy the technology products distributor for 165 pence in cash per share, which represents an around 51% premium to Premier Farnell's closing share price of 109.3 pence on Monday.
The directors of Premier Farnell have said they intend to unanimously recommend shareholders vote in favour of the deal. Datwyler has acceptances for its offer already representing 18.4% of Premier Farnell shares.
Datwyler said it believes the combination represents a "strong strategic fit", and the deal would create a "leading high-service electronic components distributor in Europe". It is expected to add to earnings per share immediately after completion, even before considering a boost from expected cost synergies.
The companies expect to produce total earnings before interest, tax, depreciation and amortisation run-rate synergies per year of CHF50 million to CHF70 million by the end of 2019.
Premier Farnell said that shareholders will remain entitled to receive its proposed final dividend for the year to end-January of 3.6 pence.
Premier Farnell separately reported revenue of GBP247.2 million for its first quarter to May 1, up from GBP240.5 million the year before.
"The sales trends of 2015/16 continued into the first quarter of this financial year, with strength in Continental Europe and Asia Pacific and difficult trading conditions in North America and UK. We remain on track to make progress in this financial year, as we increase our operational efficiency and relevance to customers, and we implement the outcomes of our operational review," said Chief Executive Officer Jops Opdeweegh in a statement.
"I am pleased we have reached an agreement with Datwyler Holding Inc on the terms of a recommended offer for Premier Farnell. I believe the combination of the two companies represents a strong strategic fit and is highly attractive for customers, shareholders and colleagues," Opdeweegh added.
Opdeweegh took up the role in March, and whilst Mark Whiteling agreed to remain as deputy chief executive officer to support him, Whiteling will now step down from the board and leave the company following its annual general meeting on Tuesday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
Copyright 2016 Alliance News Limited. All Rights Reserved.
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