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| [April 02, 2007] |
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Arrow Electronics Completes Acquisition of the Agilysys KeyLink Systems Group
MELVILLE, N.Y. --(Business Wire)-- Arrow Electronics, Inc. (NYSE:ARW) announced that it has completed its previously announced acquisition of substantially all of the assets and operations of the Agilysys KeyLink Systems Group ("KeyLink"), a leading enterprise computing solutions distributor, for $485 million in cash, subject to final adjustments based upon a closing audit. Arrow has also entered into a long-term procurement agreement with the Agilysys Enterprise Solutions Group, Agilysys' value-added reseller business.
"We are now the leading value-added distributor in the fast growing segments of storage and security and virtualization software, as well as the leading value-added distributor of enterprise products for both International Business Machines Corp. and Hewlett Packard Company. In the last fifteen months, we have transformed our industry leading, value-added enterprise computing business into a much stronger organization with a broader line card, a more robust customer and supplier base, and an expanded geographic reach," stated William E. Mitchell, chairman, president and chief executive officer of Arrow Electronics, Inc.
"The KeyLink acquisition provides us with significant cross selling opportunities to further accelerate our growth in the global enterprise computing solutions market. With this transaction, we have added more than 800 value-added resellers to our portfolio and gained over 300 highly experienced sales and marketing professionals to ensure we continue to drive superior levels of service," added Mr. Mitchell.
"With increased scale and greater levels of operating efficiency, we will further strengthen our industry leading financial performance. This acquisition is expected to be $.15 to $.17 accretive in 2007, including an estimated $.04 of intangible amortization, while generating $30 million in operating cash flow annually," added Paul J. Reilly, senior vice president and chief financial officer of Arrow Electronics, Inc. Pro forma sales for the 2007 calendar year, including revenues associated with the above mentioned procurement agreement, are expected to be in excess of $1.2 billion. The transaction was funded with cash-on-hand plus borrowings under Arrow's existing committed liquidity facilities.
Arrow Electronics (www.arrow.com) is a global provider of products, services and solutions to industrial and commercial users of electronic components and computer products. Headquartered in Melville, New York, Arrow serves as a supply channel partner for more than 600 suppliers and 140,000 original equipment manufacturers, contract manufacturers and commercial customers through a global network of 260 locations in 55 countries and territories.
Information Relating to Forward-Looking Statements
This press release includes forward-looking statements that are subject to numerous assumptions, risks and uncertainties which could cause actual results or facts to differ materially from such statements for a variety of reasons, including, but not limited to: industry conditions, the company's ongoing planned implementation of its new global financial system and new enterprise resource planning system, changes in product supply, pricing and customer demand, competition, other vagaries in the electronic components and computer products markets, changes in relationships with key suppliers, increased profit margin pressure, the effects of additional actions taken to become more efficient or lower costs, the company's ability to generate additional cash flow and the other risks described from time to time in the company's reports to the Securities and Exchange Commission (including the company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q). Forward-looking statements are those statements, which are not statements of historical fact. You can identify these forward-looking statements by forward-looking words such as "expects," "anticipates," "intends," "plans," "may," "will," "believes," "seeks," "estimates," and similar expressions. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update publicly or revise any of the forward-looking statements.
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