Acquisitions

The company accounts for acquisitions using the acquisition method of accounting. The results of operations of acquisitions are included in the company's consolidated results from their respective dates of acquisition. The company allocates the purchase price of each acquisition to the tangible assets, liabilities, and identifiable intangible assets acquired based on their estimated fair values. The fair values assigned to identifiable intangible assets acquired were determined primarily by using an income approach which was based on assumptions and estimates made by management. The excess of the purchase price over the fair value of the identified assets and liabilities has been recorded as goodwill. Any change in the estimated fair value of the net assets prior to the finalization of the allocation for acquisitions could change the amount of the purchase price allocable to goodwill. The company is not aware of any information that indicates the final purchase price allocations will differ materially from the preliminary estimates.

2012 Acquisitions

Effective January 1, 2012, the company acquired all the assets and operations of the distribution business of Seed International Ltd., a value-added distributor of embedded products in China and on January 18, 2012, the company announced an agreement to acquire TechTurn, Ltd. ("TechTurn"), a leading provider of electronics asset disposition services that specializes in the processing and sale of technology devices that are returned or recycled from businesses and consumers. TechTurn is subject to customary regulatory approvals and is expected to be completed in the first quarter of 2012. These acquisitions are not expected to have a material impact on the company’s consolidated financial position or results of operations.

2011 Acquisitions

On March 1, 2011, the company acquired all of the assets and operations of the RF, Wireless and Power Division ("RFPD") of Richardson Electronics, Ltd. ("Richardson") for a purchase price of $235,973. Richardson RFPD is a leading value-added global component distributor and provider of engineered solutions serving the global radio frequency and wireless communications market, with approximately 400 employees. Richardson RFPD's product set includes devices for infrastructure and wireless networks, power management and alternative energy markets.

On January 3, 2011, the company acquired Nu Horizons Electronics Corp. ("Nu Horizons") for a purchase price of $161,125, which included cash acquired of $18,085 and $26,375 of debt paid at closing. Nu Horizons is a leading global distributor of advanced technology semiconductor, display, illumination, and power solutions to a wide variety of commercial original equipment manufacturers and electronic manufacturing services providers in the components business. Nu Horizons has sales facilities and logistics centers throughout the world, serving a wide variety of end markets including industrial, military, networking, and data communications, and has over 700 employees globally.

The fair value of the net assets acquired, including identifiable intangible assets, relating to the Nu Horizons acquisition was approximately $162,213, which exceeds the purchase price discussed above of $161,125. Accordingly, the company recognized the excess of the fair value of the net assets acquired over purchase price paid of $1,088 ($668 net of related taxes or $.01 per share on both a basic and diluted basis) as a gain on bargain purchase. Prior to recognizing the gain, the company reassessed the fair value of the assets acquired and liabilities assumed in the acquisition. The company believes it was able to acquire Nu Horizons for less than the fair value of its net assets due to Nu Horizons' stock trading below its book value for an extended period of time prior to the announcement of the acquisition. The company offered a purchase price per share for Nu Horizons that was above the prevailing stock price thereby representing a premium to the shareholders. The acquisition of Nu Horizons by the company was approved by Nu Horizons' shareholders.

Since the dates of the acquisitions, Richardson RFPD and Nu Horizons' sales for the year ended December 31, 2011 of $876,817 were included in the company's consolidated results of operations.

The following table summarizes the allocation of the net consideration paid to the fair value of the assets acquired and liabilities assumed for the Richardson RFPD and Nu Horizons acquisitions:



Accounts receivable, net	$	194,312
Inventories	169,881
Property, plant and equipment	11,278
Other assets	6,965
Identifiable intangible assets	90,900
Cost in excess of net assets of companies acquired	31,951
Accounts payable	(98,967		)
Accrued expenses	(18,900		)
Other liabilities	(4,080		)
Noncontrolling interest	(3,239		)
Fair value of net assets acquired	380,101
Gain on bargain purchase	(1,088		)
Cash consideration paid, net of cash acquired	$	379,013

In connection with the Richardson RFPD and Nu Horizons acquisitions, the company allocated the following amounts to identifiable intangible assets:



	Weighted-Average Life
Customer relationships	8 years	$	35,400
Trade names	indefinite	49,000
Other intangible assets	(a)	6,500
Total identifiable intangible assets		$	90,900


(a)	Consists of non-competition agreements and sales backlog with useful lives ranging from one to three years.

The cost in excess of net assets acquired related to the Richardson RFPD acquisition was recorded in the company's global components business segment. Substantially all of the intangible assets related to the Richardson RFPD acquisition are expected to be deductible for income tax purposes.

During 2011, the company also acquired Pansystem S.r.l. ("Pansystem"), a distributor of high-performance wire, cable and interconnect products serving the aerospace and defense market in Italy; Cross Telecom Corporation ("Cross"), a North American service provider of converged and internet protocol technologies and unified communications; the North American IT consulting and professional services division of InScope International, Inc. and INSI Technology Innovation, Inc. (collectively "InScope"), a provider of managed services, enterprise storage management, IT virtualization, disaster recovery, data center migration and consolidation, and cloud computing services; LWP GmbH ("LWP"), a value-added distributor of computing solutions and services in Germany; Chip One Stop, Inc. ("C1S"), a supplier of electronic components to design engineers throughout Japan; and Flection Group B.V. ("Flection"), a provider of electronics asset disposition in Europe. The impact of these acquisitions were not individually significant to the company's consolidated financial position or results of operations.

The following table summarizes the company's unaudited consolidated results of operations for 2011 and 2010, as well as the unaudited pro forma consolidated results of operations of the company, as though the Richardson RFPD, Nu Horizons, Pansystem, Cross, InScope, LWP, C1S, and Flection acquisitions occurred on January 1:



	For the Years Ended December 31,
	2011				2010
	As Reported		Pro Forma		As Reported		Pro Forma
Sales	$	21,390,264	$	21,573,260	$	18,744,676	$	20,082,596
Net income attributable to shareholders	598,810		603,243		479,630		497,415
Net income per share:
Basic	$	5.25	$	5.29	$	4.06	$	4.22
Diluted	$	5.17	$	5.20	$	4.01	$	4.16

The unaudited pro forma consolidated results of operations do not purport to be indicative of the results obtained had these acquisitions occurred as of the beginning of 2011 and 2010, or of those results that may be obtained in the future. Additionally, the above table does not reflect any anticipated cost savings or cross-selling opportunities expected to result from these acquisitions.

2010 Acquisitions

On December 16, 2010, the company acquired all of the assets and operations of INT Holdings, LLC, doing business as Intechra ("Intechra"), for a purchase price of $101,085, which included $77 of cash acquired. With sales offices and processing centers in strategic locations throughout the United States and a global network of partnerships, Intechra provides fully customized electronics asset disposition services to many Fortune 1000 customers throughout the world. Intechra's service offerings include compliance services, data security and destruction, risk management, redeployment, remarketing, lease return, logistics management, and environmentally responsible recycling of all types of information technology and has approximately 300 employees.

On September 8, 2010, the company acquired Shared Technologies Inc. ("Shared") for a purchase price of $252,825, which included $61,898 of debt paid at closing. Shared sells, installs, and maintains communications equipment in North America, including the latest in unified communications, voice and data technologies, contact center, network security, and traditional telephony and has approximately 1,000 employees.

On June 1, 2010, the company acquired PCG Parent Corp., doing business as Converge ("Converge"), for a purchase price of $138,363, which included cash acquired of $4,803 and $27,546 of debt paid at closing. Converge is a global provider of reverse logistics services. Converge, with approximately 350 employees, also has offices in Singapore and Amsterdam, with support centers worldwide.

Since the dates of the acquisitions, Intechra, Shared, and Converge's sales for the year ended December 31, 2010 of $256,505 were included in the company's consolidated results of operations.

The following table summarizes the allocation of the net consideration paid to the fair value of the assets acquired and liabilities assumed for the Intechra, Shared, and Converge acquisitions:



Accounts receivable, net	$	91,001
Inventories	11,785
Property, plant and equipment	11,187
Other assets	8,615
Identifiable intangible assets	146,200
Cost in excess of net assets of companies acquired	342,446
Accounts payable	(38,961		)
Accrued expenses	(46,328		)
Other liabilities	(38,552		)
Cash consideration paid, net of cash acquired	$	487,393

In connection with the Intechra, Shared, and Converge acquisitions, the company allocated the following amounts to identifiable intangible assets:



	Weighted-Average Life
Customer relationships	10 years	$	59,800
Trade names	indefinite	78,000
Developed technology	10 years	1,700
Other intangible assets	(a)	6,700
Total identifiable intangible assets		$	146,200


(a)	Consists of non-competition agreements and sales backlog with useful lives ranging from one to two years.

The cost in excess of net assets acquired related to the Intechra and Converge acquisitions was recorded in the company's global components business segment. The cost in excess of net assets acquired related to the Shared acquisition was recorded in the company's global ECS business segment. The intangible assets related to the Shared and Converge acquisitions are not expected to be deductible for income tax purposes. The intangible assets related to the Intechra acquisition are expected to be deductible for income tax purposes.

During 2010, the company also acquired Verical Incorporated ("Verical"), an ecommerce business geared towards meeting the end-of-life components and parts shortage needs of customers; Sphinx Group Limited ("Sphinx"), a United Kingdom-based value-added distributor of security and networking products; Transim Technology Corporation ("Transim"), a service provider of online component design and engineering solutions for technology manufacturers; Eshel Technology Group, Inc. ("ETG"), a solid-state lighting distributor and value-added service provider; and Diasa Informática, S.A. ("Diasa"), a leading European value-added distributor of servers, storage, software, and networking products in Spain and Portugal. The impacts of these acquisitions were not individually significant to the company's consolidated financial position or results of operations.

The following table summarizes the company's unaudited consolidated results of operations for 2010 and 2009, as well as the unaudited pro forma consolidated results of operations of the company, as though the Intechra, Shared, Converge, Verical, Sphinx, Transim, ETG, and Diasa acquisitions occurred on January 1:



	For the Years Ended December 31,
	2010				2009
	As Reported		Pro Forma		As Reported		Pro Forma
Sales	$	18,744,676	$	19,326,092	$	14,684,101	$	15,566,217
Net income attributable to shareholders	479,630		491,688		123,512		130,633
Net income per share:
Basic	$	4.06	$	4.17	$	1.03	$	1.09
Diluted	$	4.01	$	4.11	$	1.03	$	1.08

The unaudited pro forma consolidated results of operations do not purport to be indicative of the results obtained had these acquisitions occurred as of the beginning of 2010 and 2009, or of those results that may be obtained in the future. Additionally, the above table does not reflect any anticipated cost savings or cross-selling opportunities expected to result from these acquisitions.

2009 Acquisitions

On December 20, 2009, the company acquired A.E. Petsche Company, Inc. ("Petsche") for a purchase price of $174,100, which includes $4,036 of cash acquired. Petsche is a leading provider of interconnect products, including specialty wire, cable, and harness management solutions, to the aerospace and defense market. With approximately 250 employees, Petsche provides value-added distribution services to over 3,500 customers in the United States, Canada, Mexico, the United Kingdom, France, and Belgium.

Since the date of acquisition, Petsche sales for the year ended December 31, 2009 of $3,605 were included in the company's consolidated results of operations.

The cost in excess of net assets acquired related to the Petsche acquisition was recorded in the company's global components business segment. Substantially all of the intangible assets related to the Petsche acquisition are expected to be deductible for income tax purposes.

The following table summarizes the company's unaudited consolidated results of operations for 2009 as well as the unaudited pro forma consolidated results of operations of the company, as though the Petsche acquisition occurred on January 1, 2009:



	For the Year Ended
	December 31, 2009
	As Reported		Pro Forma
Sales	$	14,684,101	$	14,867,421
Net income attributable to shareholders	123,512		133,568
Net income per share:
Basic	$	1.03	$	1.11
Diluted	$	1.03	$	1.11

The unaudited pro forma consolidated results of operations does not purport to be indicative of the results obtained had the Petsche acquisition occurred as of the beginning of 2009, or of those results that may be obtained in the future. Additionally, the above table does not reflect any anticipated cost savings or cross-selling opportunities expected to result from this acquisition.

Other

During 2010, the company made a payment of $3,060 to increase its ownership in a majority-owned subsidiary. The payment was recorded as a reduction to capital in excess of par value, partially offset by the carrying value of the noncontrolling interest.