In a press release, Avnet, Inc. declared its intention to expand by acquiring shares in RTI Holdings Ltd. The deal will also give Avnet shares in a trio of other affiliated firms, namely DSP Solutions Limited. The RTI affiliates provide services such as circuit design and product manufacturing, and their acquisition is internally forecasted to increase Avnet’s overall earnings and boost the capabilities of Avnet Electronics Marketing.
Although the share-buying transaction is supposed to close within 30 days following the initial announcement, it first had to earn numerous regulatory approvals. Avnet officials claim that the business formation deal ought to support the firm’s 12.5 percent return on capital goal and allow it to expand into new markets.
Because this acquisition is to be accomplished by purchasing shares, however, it may not affect the transfer of related intellectual properties. Patents and trademarks that are not currently owned solely by RTI or one of its affiliates may have to be dealt with on an individual basis for Avnet to take advantage of them. This business formation will also have a direct effect on the firm’s ability to garner investments by selling securities. Even though the Securities Act of 1933 doesn’t require the firm to update the forward-looking statements contained in the press release, investors may view the wide range of factors inherent in the deal as reason not to buy in.
It’s critical to plan business formation and acquisitions in order to present the resulting organizations as viable entities and gain financial support. As a result, many firms seek the assistance of attorneys who could help them structure their deals for the maximum profitability.