Avnet Outbids Daetwyler for Raspberry Pi Maker Premier Farnell

LONDON—U.S. electronics company Avnet Inc. agreed to buy Premier Farnell PLC for £ 691 million ($907 million), trumping a previous bid for the maker of the $5 Raspberry Pi computer.

Switzerland's Daetwyler Holding AG had last month agreed to buy the British company for £ 615 million. Premier Farnell on Thursday withdrew its recommendation of the Daetwyler offer.

Avnet said buying Premier Farnell would strengthen its digital capabilities in areas such as offering services for design engineering customers to do technical research online.

"This acquisition will significantly strengthen Avnet's digital footprint world-wide," said Chief Executive Bill Amelio.

"The convergence of Premier Farnell's innovative online services with Avnet's world-class supply chain will create customer service unparalleled in the industry," he added.

Avnet offered to pay 185 pence a share for Premier Farnell, an improvement on the 165 pence a share deal agreed with Daetwyler.

A spokesperson for Daetwyler said the company is considering its options.

Shares in Premier Farnell rose 17% to 192 pence in early trading Thursday.

A deal between Avnet and Premier Farnell would combine two companies that trace their history back to the interwar era as wireless communications technology became more advanced.

Premier Farnell got its start in 1934, selling radio parts in a Chicago store under the name Newark Electronics. It later merged with A.C. Farnell Ltd. to become Premier Farnell, based in the northern England city of Leeds.

Avnet began as a radio parts seller in Manhattan in 1921.

Premier Farnell built up a booming catalog business in the 1980s and 1990s, selling cables, lighting products and other electrical components to companies and hobbyists.

In recent years, though, its highest profile contract was to build and distribute the Raspberry Pi—a cheap and tiny computer designed by Raspberry Pi Foundation, a British nonprofit trying to make computers more accessible. It released its first product in 2012 and now has four models.

The cheapest is the $5 Pi Zero, which made its debut last year. The most expensive are the Pi 2 and Pi 3, both of which cost $35.

The bare-bones device has garnered buzz around the world for its price and what the foundation says is its potential to get children hooked on computing and coding. Alphabet Inc.'s Google gave the foundation a grant to provide 15,000 of its computers to U.K. schoolchildren. Last month, Queen Elizabeth II knighted Raspberry Pi creator Eden Upton.

The Raspberry Pi products look like credit-card-sized circuit boards that the user can connect to a power supply, keyboard, mouse and monitor or TV. They use the free Linux operating system. In addition to making the devices themselves, Premier Farnell, one of two licensed distributors of the Raspberry Pi products, has built up a cottage industry selling accessories for them.

Premier Farnell reported £ 778.5 million in revenue for the fiscal year ended January 2016. The division overseeing its Raspberry Pi operations reported £ 125.4 million of that, or 16%.

Avnet reported revenue of $6.17 billion for the quarter ended April 2.

Stu Woo contributed to this article.

Write to Rory Gallivan at [e-mail]

(END) Dow Jones Newswires

July 28, 2016 06:45 ET (10:45 GMT)

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