Arrow Buys Richardson RFPD – Analyst Blog

Electronic parts distributor Arrow Electronics, Inc. (ARW) recently announced that it will acquire all of the assets and operations of the RF, Wireless and Power Division of Richardson Electronics, Ltd. (RELL) for $210 million.

 

Richardson RF, Wireless and Power Division (Richardson RFPD) is a leading value-added global component distributor and provider of engineered solutions primarily serving the global radio frequency (RF) and wireless communications market. The product portfolio for the company includes solutions for infrastructure and wireless networks, power management and alternative energy markets.

 

Richardson RFPD employs approximately 400 people and will become a separate operating unit of Arrow Electronics. Richardson RFPD generated sales over $350 million for the fiscal year ended May 29, 2010. The transaction is expected to close in early 2011. Arrow expects the transaction to be accretive to earnings by 10 to 20 cents in the first full year of operations.

 

Arrow expects the acquisition will help the company to expand in the wireless and power conversion markets on a global basis with specialized expertise in RF engineering. The acquisition will also help Arrow to increase its foot print in the emerging Asia-Pacific market.

 

Arrow continues to focus on expanding its footprint in the emerging Asia-Pacific markets, which were the least impacted by the economic slowdown. Earlier, Arrow announced that it will acquire Nu Horizons Electronics (NUHC) for $7.00 per share aggregating $130 million.

 

Nu Horizons Electronics is a leading global distributor of advanced technology semiconductor, display, illumination, and power solutions to a wide variety of commercial original equipment manufacturers (OEMs) and electronic manufacturing services providers (EMS).


Employing 700 people, Nu Horizon generated $671 million of sales in fiscal 2010. The transaction, expected to close in the fourth quarter of 2010, is expected to be accretive to earnings by 5 to 10 cents in the first full year of operations.


The acquisition will enable Arrow to expand its global capabilities in the emerging Asia-Pacific region. The company caters to a wide variety of end-markets including industrial, military, networking, telecommunications, and data communications.