Bell Microproducts Inc. (Nasdaq:BELM) today provided an update on
its previously announced agreement to be acquired by Avnet, Inc.
(NYSE:AVT). The transaction is currently expected to close in early
July.
On March 28, 2010, the Company entered into a definitive
agreement to be acquired by Avnet in a cash merger for $7.00 per
share. The total transaction value of approximately $631
million is based upon an equity value of approximately $252 million
and Bell Micro's debt position, at face value and net of cash, of
$379 million at March 31, 2010. The acquisition is subject to
the approval of Bell Micro's shareholders as well as customary
regulatory approvals.
The Company and Avnet have received the necessary antitrust
approvals in the United States and Canada. The antitrust
filing has been made in the European Union and, subject to
regulatory approval, the related waiting period is expected to
expire in early July. The special meeting of shareholders to
vote on the merger is scheduled for June 28, 2010.
"Activities required to close the merger continue to progress
well and we look forward to joining with Avnet in the near future,"
said W. Donald Bell, President and Chief Executive Officer of the
Company. "This combination will deliver tremendous value to
our customers, suppliers and shareholders."
"We look forward to completing the merger in early July,"
said Roy Vallee, Chairman and Chief Executive Officer of Avnet.
"With the addition of Bell Micro's scale and scope, Avnet
will become a stronger player in key technology vertical markets,
principally data center products and embedded systems, and we will
be well positioned to capitalize on growth opportunities in Latin
America. With the companies' strengths and synergies, this
acquisition is expected to achieve our return on capital goals in
the near future."
Additional Information About the Merger and Shareholder
Meeting
In connection with the proposed merger, Bell Micro filed a
preliminary proxy statement with the SEC on April 12, 2010, and
will file and furnish to its shareholders a definitive proxy
statement. Shareholders are urged to read the definitive
proxy statement when it is finalized and distributed, because it
will contain important information about the proposed merger.
Shareholders will be able to obtain, free of charge, a copy
of the definitive proxy statement and other relevant documents
(when available) filed with the SEC from the SEC's website at
www.sec.gov, by directing a request by mail or telephone to Bell
Microproducts Inc., Investor Relations, 1941 Ringwood Avenue, San
Jose, California 95131, telephone (800) 800-1513, or from Bell
Micro's investor relations website at
http://www.bellmicro.com/thomson/secfilings.asp.
Bell Micro and certain of its directors and executive officers
may, under the rules of the SEC, be deemed to be "participants" in
the solicitation of proxies from Bell Micro's shareholders with
respect to the proposed merger. Information regarding the
interests of such persons in the merger and such persons'
beneficial ownership of Bell Microproducts Inc. common stock as of
April 2, 2010 is set forth in the preliminary proxy statement
described above.
Restatements of Consolidated Statements of Cash
Flows
On May 28, 2010, the Audit Committee of the Company's Board
of Directors concluded, in consultation with Company management,
that the Company's consolidated statements of cash flows included
in its consolidated financial statements for 2009, 2008 and 2007,
the interim quarterly periods for 2009 and 2008, and the quarter
ended March 31, 2010 contained errors and required adjustment, and
that those statements should no longer be relied upon. The
errors, which pertained to the impact of foreign currencies, had no
effect on the Company's previously reported total cash, net income
or balance sheet data for any prior period. Today, the Company
filed with the SEC amendments to its Annual Report on
Form 10-K for the year ended December 31, 2009 and its
Quarterly Report on Form 10-Q for the period ended March 31,
2010, that included the corrected and restated consolidated
statements of cash flows. Additional information about the
restatement is included in these amended filings and the Current
Report on Form 8-K filed by the Company with the SEC earlier
today.
About Bell Microproducts Inc.
Bell Microproducts (Nasdaq:BELM) is an international,
value-added distributor of a wide range of high-tech products,
solutions and services, including storage systems, servers,
software, computer components, and peripherals, as well as
maintenance and professional services. An industry-recognized
specialist in storage products, this Fortune 1000 company is one of
the world's largest storage-centric value-added distributors.
In 2010, the Company celebrated the sale of its 100 millionth
hard disk drive, setting a significant industry milestone.
Bell Microproducts is uniquely qualified with deep technical and
application expertise to service a broad range of information
technology needs. From design to deployment, its products are
available at any level of integration, from components to subsystem
assemblies and fully-integrated, tested and certified system
solutions. More information can be found in the Company's SEC
filings, or by visiting the Bell Microproducts website at
http://www.bellmicro.com.
Forward-Looking Statements
Some of the statements included in this press release constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. You should not place
undue reliance on these statements. These forward-looking
statements include statements that reflect the current views of our
senior management with respect to our business and industry in
general. Statements that include the words "expect," "intend,"
"believe," "anticipate" and similar statements of a future or
forward-looking nature identify forward-looking
statements. Statements regarding the merger, satisfaction of
the conditions to the closing of the merger, including approval by
the Company's shareholders and regulatory approval in the European
Union, the timing of the completion of the merger, and the combined
company following the merger are forward-looking statements.
Forward-looking statements address matters that involve risks
and uncertainties, for example, if we do not receive the required
shareholder approval or the parties fail to satisfy other
conditions to closing, the transaction will not be
consummated. Accordingly, there are or will be important
factors that could cause our actual results to differ materially
from those indicated in these statements. We believe that
these factors include, but are not limited to, the
following: the occurrence of any event, change or other
circumstance that could give rise to the termination of our merger
agreement with Avnet that could require us to reimburse Avnet up to
$2.5 million for fees and expenses and to pay Avnet a
termination fee of up to $10.5 million (less any reimbursement of
fees and expenses already made); the outcome of legal proceedings
instituted against us and others relating to the proposed merger;
the failure to obtain shareholder approval for the proposed merger
or the failure to satisfy other conditions to completion of the
merger; our inability to obtain any required regulatory approvals,
including in the European Union, related to the merger in a timely
manner, or at all; the failure of the merger to close for any other
reason; risks that the proposed merger disrupts our current plans
and operations and the potential difficulties in employee retention
as a result of the merger; the effect of the announcement of the
merger on our business and customer relationships, operating
results and business generally, including our ability to retain key
employees; the costs, fees, expenses and charges related to the
merger, which we will not recover if we do not complete the merger;
the material weaknesses in our internal control over financial
reporting and in our disclosure controls and procedures; the
outcome of any pending or future litigation or regulatory
proceedings, including the current shareholder lawsuits related to
the proposed merger and any claims or litigation related to the
restatements of our consolidated financial statements; risks
related to our substantial indebtedness, including the inability to
obtain additional financing for our operations on terms acceptable
to us or at all; our ability to comply with the financial covenants
in our credit agreements; limitations on our operating and
strategic flexibility under the terms of our debt agreements; our
reliance on credit provided by our manufacturers to finance our
inventory purchases; the effects of a prolonged economic downturn;
our reliance on third parties to manufacture the products we sell;
competition in the markets in which we operate; risks associated
with doing business abroad, including foreign currency risks; our
ability to accurately forecast customer demand and order sufficient
product quantities; the fact that the products we sell may not
satisfy shifting customer demand or compete successfully with our
competitors' products; loss or adverse effect on our supplier
relationships, including the reduction or elimination of rebates
offered by our manufacturers; our ability to achieve cost
reductions and other benefits in connection with our strategic
initiatives; our ability to attract and retain qualified personnel;
and our inability to identify, acquire and integrate acquired
businesses.
For a more detailed discussion of how these and other risks and
uncertainties could cause our actual results to differ materially
from those indicated in our forward-looking statements, see our
reports filed with SEC (available at www.sec.gov), including our
Annual Report on Form 10-K/A for the year ended December 31, 2009
and our Quarterly Report on Form 10-Q/A for the period ended March
31, 2010.
CONTACT: Bell Microproducts Inc.
Investor Relations
Nicole Noutsios
(510) 451-2952
ir@bellmicro.com
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