OREANDA-NEWS. S&P Global Ratings today revised its outlook on Phoenix, Ariz.-based Avnet Inc. to negative from stable, and affirmed all of its ratings, including the 'BBB-' corporate credit rating on the company.

Avnet expects to receive net cash proceeds of approximately $2 billion. The company expects the transaction to close in the first half of 2017.

"The rating action reflects our assessment of risks related to the divestiture of its TS business in addition to the previously announced planned acquisition of Premier Farnell," said S&P Global Ratings credit analyst Tuan Duong. "Furthermore, the company's pro forma credit metrics could weaken, as the use of sales proceeds from its TS divestiture has yet to be determined," he added.

The negative outlook reflects our assessment of risks related to the divestiture of its TS business in addition to the previously announced planned acquisition of Premier Farnell. Furthermore, the company's pro forma credit metrics could weaken, as the use of sales proceeds from its TS divestiture has yet to be determined.

We could lower the rating if the company experiences significant business disruptions from the divestiture of its TS business or integration of its Premier Farnell acquisition. Additionally, we could consider a lower rating if the company's credit metrics significantly deviate from our expectations, such that leverage is sustained above 3x over the next 12 to 24 months.

We could revise the outlook to stable if the company is able to successfully divest its TS business and also integrate its acquisition of Premier Farnell without major business disruptions, while returning its credit metrics to historical measures (e. g., leverage declines to below 3x over the next 12 to 24 months).