Daetwyler: Switzerland's Daetwyler Defies Brexit Worries to Scoop Up Premier Farnell

Switzerland's Daetwlyler on Tuesday cast aside worries surrounding a possible British retreat from the European Union by striking a £792 million ($1.1 billion) deal to buy electronics distributor Premier Farnell, of the U.K.. Daetwyler agreed to pay 165 pence in cash for the stock, which values the equity at £615 million, or 51% more than it was worth at Monday's close. The deal marks a rare buyout of a London-listed company ahead of next week's vote on whether the U.K. leaves the European Union. The bidder said the two companies have complementary product ranges and can generate savings, particularly in the fragmented market for high-service electronic components. The merged company would have had 2015 revenue of Sfr2.5 billion ($2.6 billion) and would employ 4,900 staff, the buyer said, noting that the purchase should boost its own earnings immediately on completion. Premier Farnell's shares in London were recently up more than 50% at 164.25 pence. Daetwyler's shares in Zurich were down 1.4% at Sfr138.10. The company has a market value of about Sfr2.3 billion. The deal came as Premier Farnell posted a 1.4% decline in first-quarter sales. The Leeds, England company, which is best known for its low-cost Raspberry Pi computer, issued a string of profit warnings last year. In February it agreed to sell its Akron Brass business to industrial manufacturer Idex for $224.2 million after a Lazard auction and in March it appointed Jos Opdeweegh, a former chief executive of Neovia Logistics, a Caterpillar spinout, to fill the vacancy for the top position. "The Premier Farnell directors believe that this offer recognizes the quality of our business and its future prospects, and provides our shareholders with immediate and significant value in cash for their shares," said the target's chairman, Valerie Gooding, in a statement. Dealogic Ltd. data for the year to June 8 showed that the value of U.K. inbound M&A had fallen by 69% year-on-year, with advisers suggesting companies were holding off on announcements involving U.K. targets until after Britain votes on June 23 about whether to remain in the European Union. The agreement for Premier Farnell is conditional on antitrust clearances in the U.S., Germany and Austria but not contingent on the U.K. remaining part of the European Union. Daetwyler said the enlarged group will target run-rate synergies of Sfr50 to Sfr70 million by the end of 2019. The company said institutional shareholders owning 18.4% had agreed to vote in favor of the deal, though not all that support is binding. Daetwyler plans to buy Premier Farnell through a so-called scheme of arrangement, which needs the backing of Premier Farnell shareholders owning at least 75% of the stock at a special meeting, and the support of a majority of investors by number. The Lazard team advising Premier Farnell included Nicholas Shott; Cyrus Kapadia, Vasco Litchfield and Eugene Schreider. Barclays's Mark Astaire, Nicola Tennent and Richard Bassingthwaighte also provided financial advice. Daetwyler's advisers were led by UBS' Jonathan Rowley, Martin Kesselring, Jean-Baptiste Petard and Sandip Dhillon.Click to view a price quote on CAT.Click to research the Industrial industry.