AVNET, INC. (NYSE:AVT) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
Amendment to Interest Purchase Agreement
As previously announced, on September 19, 2016, Avnet, Inc. (the
Company) entered into an Interest Purchase Agreement (the
Interest Purchase Agreement) with Tech Data Corporation (the
Buyer), to which, the Company agreed to sell its Technology
Solutions operating group (the TS Business) to the Buyer.
On February 27, 2017, the Company and the Buyer entered into the
First Amendment to the Interest Purchase Agreement (the Amendment
and the Interest Purchase Agreement, as so amended, the Purchase
Agreement), to which the parties agreed, among other things, that
certain intercompany indebtedness in China would remain
outstanding following the Closing and be payable by the Buyers
subsidiaries to the Companys subsidiaries and to modify the
definition of Retained Business to exclude the business of
integration and resale of certain technology products in the
United States to certain customers.
Other than as expressly modified the Amendment, the Interest
Purchase Agreement, which was filed as Exhibit 2.1 to the
Companys Current Report on Form 8-K filed with the Securities and
Exchange Commission (the SEC) on September 20, 2016 and is
incorporated herein by reference, remains in full force and
effect as originally executed on September 19, 2016.
The foregoing description of the Purchase Agreement does not
purport to be complete and is qualified in its entirety by
reference to the full text of (1) the Interest Purchase
Agreement, and (2) the Amendment, a copy of which is filed
herewith as Exhibit 2.2 and incorporated herein by reference.
Accounts Receivable Securitization Program
In connection with the Companys sale of its TS Business to the
Buyer, on February 27, 2017, the Company and Avnet Receivables
Corporation, a wholly owned subsidiary of the Company (ARC),
entered into the Third Amended and Restated Receivables Purchase
Agreement with the companies and financial institutions party
thereto (collectively, the Purchasers) and JPMorgan Chase Bank,
N.A., as agent (the Receivables Purchase Agreement). to the
Receivables Purchase Agreement, ARC may sell, on a revolving
basis, an undivided interest of up to $400 million in eligible
receivables to the Purchasers.As of February 27, 2017,
approximately $274 million was outstanding under the Receivables
Purchase Agreement. The accounts receivable securitization
program expires on August 19, 2018.Borrowings under the program
bear interest at a base rate or commercial paper rate, plus an
applicable margin.The Receivables Purchase Agreement amends and
supersedes the Second Amended and Restated Receivable Purchase
Agreement, dated August 26, 2010 as amended, among the Company,
ARC, the companies and financial institutions party thereto and
JPMorgan Chase Bank, N.A.
Concurrent with entry into the Receivables Purchase Agreement,
the Company and ARC entered into the Amended and Restated
Receivables Sale Agreement (the Receivables Sale Agreement and
together with the Receivables Purchase Agreement, the Receivables
Documents).Under the Receivables Sale Agreement, the Company
agreed to sell, and ARC agreed to purchase, certain accounts
receivable originated by the Company in the United States for a
purchase price reflecting a discount from the aggregate balance
of such accounts receivable and certain credit adjustments.The
Receivables Sale Agreement amends and supersedes the receivable
sale agreement, dated June 28, 2001 as amended, between the
Company and ARC.
Some or all of the parties to the Receivables Purchase Agreement,
or their affiliates, have in the past provided investment or
commercial banking services to the Company and its affiliates for
which they received customary fees and expenses, and they may
provide similar services in the future.
****
The foregoing descriptions of the Receivables Documents do not
purport to be complete and are qualified in their entirety by
reference to the full text of the Receivables Purchase
Agreement and the Receivables Sale Agreement, attached hereto
as Exhibits 10.1 and 10.2, respectively, and incorporated
herein by reference.
The Purchase Agreement and the Receivables Documents have been
included to provide investors and security holders with
information regarding their terms. They are not intended to
provide any other factual information about the TS Business,
the Company, the Buyer, ARC or any of their respective
subsidiaries or affiliates. The representations, warranties and
covenants contained in the Purchase Agreement and the
Receivables Documents (i) were made by the parties thereto only
for purposes of those agreements and as of specific dates; (ii)
were made solely for the benefit of the parties to the Purchase
Agreement or the Receivables Documents, as the case may be;
(iii) may be subject to limitations agreed upon by the
contracting parties, including being qualified by confidential
disclosures exchanged between the parties in connection with
the execution of the Purchase Agreement or the Receivables
Documents, as the case may be (such disclosures include
information that has been included in public disclosures, as
well as additional non-public information); (iv) may have been
made for the purposes of allocating contractual risk between
the parties to the Purchase Agreement or the Receivables
Documents instead of establishing these matters as facts; and
(v) may be subject to standards of materiality applicable to
the contracting parties that differ from those applicable to
investors. Investors should not rely on the representations,
warranties and covenants or any descriptions thereof as
characterizations of the actual state of facts or condition of
the TS Business, the Company, the Buyer, ARC or any of their
respective subsidiaries or affiliates. Additionally, the
representations, warranties, covenants, conditions and other
terms of the Purchase Agreement and the Receivables Documents
may be subject to subsequent waiver or modification.
Information concerning the subject matter of the
representations, warranties and covenants may change after the
date of the Purchase Agreement or the Receivables Documents, as
the case may be, which subsequent information may or may not be
fully reflected in the Companys public disclosures. The
Purchase Agreement and the Receivables Documents should not be
read alone, but should instead be read in conjunction with the
other information regarding the Company that is or will be
contained in, or incorporated by reference into, the Forms
10-K, Forms 10-Q and other documents that are filed with the
Securities and Exchange Commission.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On February 27, 2017, the Company completed the previously
announced divestiture of the TS Business to the Buyer to the
terms of the Purchase Agreement.The Company received
approximately $2.4 billion in cash,which excludes net working
capital and other contractual sales price adjustmentsand $247
million of the Buyer common stock based on the closing price of
the Buyer shares on February 27, 2017.
Item 2.03Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The disclosure required hereunder is provided under Item 1.01
and is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On February 27, 2017, in connection with the divestiture of the
TS Business, the employment of Patrick Zammit, Senior Vice
President of the Company and President of Avnet Technology
Solutions, with the Company was terminated.
Item 8.01 Other Events.
On February 27, 2017, the Company issued a press release
announcing the completion of the TS Business divestiture. A
copy of the press release is attached as Exhibit 99.1 hereto
and is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(b)Pro forma financial information
The Companys unaudited pro forma condensed consolidated
financial statements, which reflects the TS Business
divestiture described in Item 2.01, is furnished as Exhibit
99.2 to this Current Report on Form 8-K and is incorporated
herein by reference.
(d)Exhibits
|
Exhibit No. |
Description |
|
2.2 |
First Amendment to Interest Purchase Agreement, dated |
|
10.1 |
Third Amended and Restated Receivables Purchase |
|
10.2 |
Amended and Restated Receivables Sale Agreement, dated |
|
99.1 |
Press release issued by Avnet, Inc. on February 27, |
|
99.2 |
Unaudited pro forma condensed consolidated financial |
About AVNET, INC. (NYSE:AVT)
Avnet, Inc. is a distributor of electronic components, enterprise computer, networking and storage products and software, information technology solutions and services, and embedded subsystems. The Company operates through two segments: Electronics Marketing (EM) and Technology Solutions (TS). The EM segment markets and sells semiconductors and interconnect, passive and electromechanical devices (IP&E), and embedded products to a customer base serving various end markets. The TS segment focuses on the distribution of enterprise computing servers and systems, software, storage, services and solutions from the technology manufacturers and software developers. It also provides hard disk drives, microprocessor, motherboard and dynamic random access memory module technologies to manufacturers of general-purpose computers and system builders. It has operations in the Americas; Europe, the Middle East and Africa (EMEA), and Asia/Pacific, consisting of Asia, Australia and New Zealand (Asia). AVNET, INC. (NYSE:AVT) Recent Trading Information
AVNET, INC. (NYSE:AVT) closed its last trading session down -0.12 at 46.37 with 1,433,084 shares trading hands.