Avnet Tries Buying Its Way to the Top - ' What Makes a Good '

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Merger Candidate?">

Kamins said Avnet looks for three important things in a merger deal. "One is strategy—they have to be in a business, and in a marketplace, that's supportive of and collaborative with our own strategy. Two, the financials have to be in order. If you don't do your homework, you end up paying too much. We've had cases where we were surprised." The third element, he said, "may be more critical than the other two: The culture has to fit."

That may sound a little mushy, but Kamins gets down to specifics when he talks with executives about their mutual compatibility. As the Memec deal was coming together, for example, he met extensively with Phillips to take his measure.

"When we first got together, I didn't know if we wanted him, or him us," Kamins said. "I said to him, 'Memec is run globally and centrally, the IT people around the world have hard-line responsibility to you. Avnet is different; we operate on a regional basis with a more entrepreneurial style. Our IT leader in Europe has direct responsibility to the European business head, and to me as CIO. Are you comfortable with that?' I looked him in the eye, and he said yes."

The conversation continued over the course of a couple of months. "We probably spent 20 hours together," Kamins said. "We knew we weren't BS-ing each other. I knew he was telling me what he really thought." Phillips said, "It was a very important discussion we were having, one that allowed us to come to a subjective view of what could work." If things in Asia go according to plan, it's a conversation Phillips will be having many times in the future.

Story Guide:
Avnet Tries Buying Its Way to the Top

Fueling the Right Kind of Growth

Quick Mergers Require Quick Migrations

Relying on Mergers for Growth

What Makes a Good Merger Candidate?

Competitive Difference: How Avnet's Competition Does Mergers, or Not

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