Avnet targets IP&E, Asia with YEL acquisition

Avnet claims the acquisition of YEL Electronics Hong Kong solidifies its position as the largest distributor of interconnect, passive and electromechanical products in Asia.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 1/2/2008

In a move Avnet Inc claimed solidifies its position as the largest distributor of interconnect, passive and electromechanical (IP&E) products in Asia, the electronics supply chain giant today announced it has acquired YEL Electronics Hong Kong Ltd, a distributor of IP&E semiconductor components in the region, representing more than 30 franchised suppliers.  
 
YEL serves more than 2,000 customers in 8 countries across Asia Pacific and generated approximately $200 million in 2007 revenue with more than 80 percent of that coming from IP&E products. 

“The IP&E distribution industry in Asia is highly fragmented and Avnet intends to actively participate in its consolidation,” Harley Feldberg, president of Avnet Electronics Marketing global, said in a statement, noting that the acquisition is another significant step in the Phoenix-based company’s strategy to accelerate growth. “The acquisition of YEL provides an excellent opportunity to supplement our organic growth initiatives by adding a well respected regional distributor with a management team that shares our focus on profitable growth and superior customer service. With this acquisition, we have increased our IP&E business in Asia by over 50% and become the largest IP&E distributor in the region.”
 
The double-digit growth Asia Pacific region has garnered much of Avnet’s attention in recent quarters through its acquisition strategy and distributor agreements. Indeed, Avnet in 2007 purchased Azure Technologies, which operates through various entities in Singapore and Malaysia, and has been focused on the distribution of IBM  systems and solutions since 1996; and inked several Asia-related electronics supply chain deals, including the November expansion of an agreement with Tyco Electronics to include Asia Pacific.

“The acquisition of YEL is a clear demonstration of Avnet’s commitment to invest in the high growth Asia components market,” Stephen Wong, president of Avnet Electronics Marketing Asia, said in the statement. “With a larger team of talented people, a broadened account base and an expanded line card, Electronics Marketing Asia will have additional opportunities to accelerate organic growth while leveraging our scale and scope advantages to deliver superior value to our trading partners.” 
 
Avnet YEL will operate as a specialist division to maintain its focus on IP&E profitable growth, the company said, adding that the combined customer base will also provide additional opportunities for cross selling.

Financial details of the acquisition were not released.