S&P ups Avnet outlook to stable

Standard & Poor's said it revised its outlook on Avnet Inc. to stable from negative to reflect the company's improving profitability and financial profile. The company's BBB- corporate credit rating, BBB- senior unsecured debt rating and BB+ subordinated debt rating were affirmed.

S&P said the ratings on Avnet reflect its strong market position and adequate profitability offset by highly competitive industry conditions. Avnet reported revenues of $14.3 billion for fiscal 2006, an increase of 29% over the prior-year period. The company has successfully used acquisitions to enhance its market position and supplier base, including the July 2005 acquisition of Memec Group Holdings Ltd.

Total debt to EBITDA improved to 2.5x at the end of fiscal year 2006, down from 3.7x at the prior year-end. The agency attributed the improvement entirely to EBITDA growth.

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