As electronics products become more complex, supply chain partners have to step up their level of technical expertise. This includes distributors, which are assisting customers with their design needs as well as fulfilling massive bills of material.
This trend is expanding on a global basis. U.S.-based distributor Avnet Inc. has announced intentions to acquire MSC Investoren GmbH (“MSC Group”), a Europe-based expert in embedded computing technology, display solutions and electronic component distribution. MSC leverages a unique combination of distribution, production and system integration capability to address the emerging customer demand for more complex electronic products. The company generated revenue in excess of $450 million in the 2012 calendar year, with embedded computer technology (including display solutions) accounting for almost 50 percent of its sales.
“The addition of the MSC Group is a strong fit with our strategy to invest in margin enhancing acquisitions that complement our existing design and supply chain services, while also expanding growth opportunities in the region,” said Harley Feldberg, president of Avnet Electronics Marketing Global. “With extensive engineering resources and a strong focus on design-in services, the MSC Group has built a solid reputation as a single source for complete solutions serving customers in the European industrial electronics market. By leveraging the combined skills of both organizations, we will be well positioned to better serve the needs of our customer base in the region.”
Patrick Zammit, president of Electronics Marketing EMEA, added, “MSC Group’s distribution portfolio is a complementary fit with our core business that improves our offerings in microcontrollers, memory, programmable logic, opto and LED products. The embedded computing and display solutions businesses enhance our competencies in systems level solutions, thereby increasing our value add with customers in these higher growth product segments. We are excited about MSC Group and its talented employees as this represents another step in our business evolution as we progress up the technology value chain and provide additional services that our customers need.”
Founded in 1979, MSC Group serves customers in the automotive, industrial automation, telecom, information systems and medical device markets. MSC Group’s logistics and distribution capabilities, along with its competence in board-level assemblies and system integration, allows it to address customers’ demand profiles along the electronics value chain. With a team of field application engineers and product specialists, MSC Group provides a range of technical support throughout the entire product development chain from design to finished system. The operations of MSC Group will be integrated into the European business region of Avnet’s Electronics Marketing operating group.
The acquisition agreement details a two-step approach whereby Avnet will acquire a majority interest in MSC Group after regulatory approval has been granted with the intent to acquire the remainder of the company within a short time frame. This transaction, which is subject to customary regulatory approvals, is expected to be immediately accretive to earnings and supports Avnet's long-term return on capital goal of 12.5 percent.