Investors in Premier Farnell (PFL) received a surprise in this week's first-quarter results, and for once it wasn't a profit warning. Instead, the Leeds-based electronic group confirmed its imminent purchase by Swiss industrial component manufacturer Datwyler, in a £615m all-cash offer, which values the maker of the Raspberry Pi mini-computer at a 51 per cent premium to its closing share price.
The deal spells an abrupt end to a tough couple of years for Premier shareholders, who have seen the company hit by weak trading in the UK and US, supply problems and management churn. For Datwyler, the transaction "represents a strong strategic fit" due to the two companies' shared product range, distribution channels and geographic spread, and is expected to be immediately earnings enhancing. This is in part due to Premier's buying prices, which are 6-7 per cent lower than the Swiss group's technical components division, while a further CHF25-35m (£18m-26m) of cost savings have already been earmarked.
Premier Farnell shareholders will still be entitled to the proposed 3.6p final dividend for the last financial year, due on Thursday 23 June.
