2. Acquisitions

Fiscal 2017 Acquisitions

Premier Farnell

On October 17, 2016, the Company acquired all of the outstanding shares of Premier Farnell Plc (“PF”), a global distributor of electronic components and related products delivering engineering solutions to the electronic system design community utilizing multi-channel sales and marketing resources.

The cash consideration paid for the PF acquisition was approximately $841 million, which consisted of £1.85 per share of PF common stock. Additionally, Avnet assumed $242.8 million of debt at fair value. The PF business and the goodwill acquired is being integrated into Avnet’s continuing operations and is considered a reportable segment at the end of fiscal 2017.

In connection with the acquisition of PF, the Company incurred certain acquisition related costs during fiscal 2017, including approximately $19.0 million of acquisition related professional fees and closing costs included within restructuring, integration and other expenses, and approximately $45.0 million of expenses within other (expense) income, net for acquisition financing related fees including foreign currency economic hedging costs and bridge financing commitment fees. Since the date of acquisition, PF contributed approximately $22.0 million of income from continuing operations during fiscal 2017.

Preliminary allocation of purchase price

The Company has not yet completed its evaluation and determination of certain assets and liabilities acquired, primarily (i) the final valuation of software and technology related amortizable intangible assets acquired; and (ii) the final assessment and valuation of certain income tax accounts. During the fourth quarter of fiscal 2017, the Company updated its estimated acquisition date fair values for assets acquired and liabilities assumed, the most significant of which resulted in a decrease in goodwill of $21.1 million, a decrease in property, plant and equipment of $3.6 million, a decrease in inventories of $6.6 million, a decrease in accounts payable, accrued liabilities and other current liabilities of $21.2 million and a decrease in other long-term liabilities of $10.1 million. The Company expects the final valuations and assessments will be completed by the first quarter of fiscal 2018, which may result in adjustments to the preliminary values included in the following table:


	Preliminary Acquisition Method Values
	(Thousands)
Cash	$	46,354
Trade and other receivables, net		187,303
Inventories		328,037
Property, plant and equipment		52,621
Intangible assets		295,112
Total identifiable assets acquired	$	909,427

Accounts payable, accrued liabilities and other current liabilities	$	160,724
Short-term debt		242,814
Other long-term liabilities		140,431
Total identifiable liabilities acquired	$	543,969
Net identifiable assets acquired		365,458
Goodwill		475,862
Net assets acquired	$	841,320

Trade receivables of $160.4 million were recorded at estimated fair value amounts; however, adjustments to acquired amounts were not significant as book value approximated fair value due to the short-term nature of trade receivables.

Approximately $10.0 million of goodwill associated with the PF acquisition is expected to be deductible for tax purposes.

Pro forma and historical results (Unaudited)

Unaudited pro forma information from continuing operations is presented as if the acquisition of PF occurred at the beginning of fiscal 2016. The pro forma information presented below does not purport to present what actual results would have been had the acquisition in fact occurred at the beginning of fiscal 2016, nor does the information project results for any future period.


	Years Ended
	July 1,		July 2,
	2017		2016
	(Millions, except per share data)
Pro forma sales (unaudited)	$	17,818	$	18,102
Pro forma net income (unaudited)		297		398
Pro forma net income per fully diluted share (unaudited)		2.31		2.99

Pro forma results from continuing operations exclude any benefits that may result from the acquisition due to synergies derived from sales opportunities and the elimination of any duplicative costs. Pro forma results exclude results of discontinued operations and restructuring, acquisition and divestiture related expenses incurred by PF in their historical results of operations and include amortization expense associated with identifiable intangible assets related to the Company’s acquisition of PF. Pro forma results also exclude interest expense related to acquired long-term debt that was repaid in connection with the acquisition, and other expense related to historical divestiture and debt redemption losses. Since the date of acquisition through the end of fiscal 2017, PF generated sales of $965.9 million.

During November 2016, the Company acquired Hackster, Inc. (“Hackster”), a start-up online community of engineers, makers and hobbyists. The purchase price of Hackster was not material to the Company’s consolidated financial statements.