Exhibit 99.1
Arrow Electronics to Acquire the Agilysys KeyLink Systems Group
--Arrow to Become Leading Distributor of IBM and HP Enterprise
Products--
--Further Increases Revenues From Fast Growing Storage and
Software Markets--
--Acquisition Immediately Accretive Post Closing--
MELVILLE, N.Y.--(BUSINESS WIRE)--Jan. 2, 2007--Arrow Electronics,
Inc. (NYSE:ARW) announced today that it has signed a definitive
agreement pursuant to which Arrow will acquire substantially all of
the assets and operations of the Agilysys KeyLink Systems Group
("KeyLink"), a leading enterprise computing solutions distributor, for
$485 million in cash. Arrow will also enter into a long-term
procurement agreement with the Agilysys Enterprise Solutions Group,
Agilysys' value-added reseller business.
Based in Cleveland, Ohio, KeyLink is a leading value-added
distributor of enterprise servers, storage and software in the United
States and Canada. Through approximately 500 employees, KeyLink
provides complex solutions from industry leading manufacturers to more
than 800 reseller partners. Pro forma sales for the 2006 calendar year
are expected to be approximately $1.6 billion, which include revenues
that will be associated with the above-mentioned procurement
agreement.
"With this acquisition, we will become the leading distributor of
enterprise products for both International Business Machines Corp. and
Hewlett Packard Company, as well as the leading value-added
distributor of storage and software," stated William E. Mitchell,
chairman, president and chief executive officer of Arrow Electronics,
Inc. "Keylink is a natural complement to our existing enterprise
computing solutions business with its value-added approach and its
resellers' focus on small and medium sized customers," added Mr.
Mitchell.
"Our partnership will create significant cross selling
opportunities to further accelerate our growth in the global
enterprise computing solutions distribution market. All field sales
positions will remain intact to ensure that we will continue to
provide our customers and suppliers with superior levels of service,"
stated M. Catherine Morris, president, Arrow Enterprise Computing
Solutions.
"We believe KeyLink will further benefit from Arrow's considerable
global scale, vast customer base, strong financial resources and
leadership in the technology distribution market," said Arthur Rhein,
chairman, president and chief executive officer of Agilysys. "As a
result of this transaction, both Agilysys and Keylink will be better
positioned to achieve their full potential as Agilysys focuses solely
on growing its information technology solutions business. We wish
Arrow well as they continue to grow their business," added Mr. Rhein.
"The acquisition is expected to be $.18 to $.22 accretive in the
first twelve months and will further strengthen our industry leading
return on invested capital, while generating an expected $30 million
in operating cash flow annually," added Paul J. Reilly, senior vice
president and chief financial officer of Arrow Electronics, Inc.
The transaction, which will be funded with cash-on-hand plus
borrowings under Arrow's existing committed liquidity facilities, is
subject to customary closing conditions, including obtaining the
necessary government approvals, and is expected to be completed within
90 days. Goldman, Sachs & Co. acted as financial advisor and Milbank,
Tweed, Hadley & McCloy LLP acted as legal counsel to Arrow in
connection with this transaction.
A conference call and audio webcast relating to this announcement
have been scheduled for January 3, 2007 at 10 AM eastern time. The
call is accessible by telephone at 800-811-8824 (toll-free) or
913-981-4903 for participants outside the United States and Canada.
The access code is 2453171. An audio replay of the call will be
available through January 10, 2007. The replay numbers are
888-203-1112 for the United States and Canada and 719-457-0820 for
callers from other countries. The access code is 2453171. To access
the live webcast, visit www.arrow.com/investor. The webcast replay
will be available through January 17, 2007.
Arrow Electronics (www.arrow.com) is a major global provider of
products, services and solutions to industrial and commercial users of
electronic components and computer products. Headquartered in
Melville, New York, Arrow serves as a supply channel partner for
nearly 600 suppliers and more than 130,000 original equipment
manufacturers, contract manufacturers and commercial customers through
a global network of over 270 locations in 53 countries and
territories.
Information Relating to Forward-Looking Statements
This press release includes forward-looking statements that are
subject to numerous assumptions, risks and uncertainties which could
cause actual results or facts to differ materially from such
statements for a variety of reasons, including, but not limited to:
industry conditions, the company's ongoing planned implementation of
its new global financial system and new enterprise resource planning
system, changes in product supply, pricing and customer demand,
competition, other vagaries in the electronic components and computer
products markets, changes in relationships with key suppliers,
increased profit margin pressure, the effects of additional actions
taken to become more efficient or lower costs, and the company's
ability to generate additional cash flow. Shareholders and other
readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date on which
they are made. The company undertakes no obligation to update publicly
or revise any of the forward-looking statements.
CONTACT: Arrow Electronics, Inc.
Ira M. Birns, 631-847-1657
Vice President & Treasurer
or
Paul J. Reilly, 631-847-1872
Senior Vice President & Chief Financial Officer
or
Media:
Jacqueline F. Strayer, 631-847-2101
Vice President, Corporate Communications