Avnet Inc (NYSE:AVT), a distributor of electronic components and computer products, has agreed to acquire software and hardware distributor itX Group Limited for AU$77.5 million in cash.
Under the terms of the agreement, ItX Group has reserved the right to pay a AU$10 million special dividend to its shareholders, in which case Avnet’s offer will be reduced accordingly.
"This acquisition is another step in our strategic expansion in the Asia Pacific region and, in particular, increases our scale and scope in the Australian market," said president of Avnet Technology Solutions Phil Gallagher.
The itX business is expected to add complementary suppliers and business partners to Avnet, while doubling Avnet Technology Solutions`presence in Australia and helping it pursue organic growth, Avnet said.
Investors were unimpressed by the acquisition, as Avnet’s stock price has retreated 1.72% to trade at $23.99 since the release.
Australia-based ItX Group has approximately 150 employees and it generated revenue of approximately AU$147 million in 2009. Some of its clients include Oracle, IBM, HP, Vmware, Citrix, Red Hat, Trend Micro, and Apple. ItX also owns Briell Marketing, a distributor of printers and media for security cards; Sydmed, a distributor of medical devices; and ICO, a provider of IT hosting solutions.
The deal is still subject to approval from ItX Group’s shareholders, though it has already been recommended by the board.