In an agreement announced this week, distributors Synnex and Tech Data will combine through an agreement valued at approximately US$7.2 billion, including net debt.
The combined company is expected to generate about $57 billion in estimated pro forma annual revenues and will employ approximately 22,000 people.
“We are excited to partner with a world-class industry leader like Tech Data and believe that this combination will benefit all our stakeholders,” said Dennis Polk, Synnex president and CEO in a company statement. “This transaction allows for accelerated revenue and earnings growth, an expanded global footprint, and the ability to drive significant operating improvements while continuing to create shareholder value. We look forward to working with the talented colleagues at Tech Data and expect our combined business will create the opportunity for team members to produce the highest levels of service to our partners.”
“This is transformational for Tech Data, Synnex and the entire technology ecosystem. Together, we will be able to offer our customers and vendors exceptional reach, efficiency, and expertise, redefining the experience and value they receive,” added Rich Hume, Tech Data CEO. “The combined company will also benefit from significant financial strength to invest in its core growth platform as well as next generation cybersecurity, cloud, data, and IoT technologies, which are experiencing explosive growth due to work from home and return to office trends. We could not have reached this milestone without the hard work of our colleagues, and we look forward to working together with the Synnex team to seamlessly bring our companies together and to create meaningful value for all our stakeholders.”
Tech Data currently is wholly owned by funds managed by affiliates of Apollo Global Management, Inc. and their co-investors. Apollo completed its acquisition of Tech Data in June 2020.
Under the terms of the Synnex agreement, Apollo Funds will receive an aggregate of 44 million shares of Synnex common stock plus the refinancing of existing Tech Data net debt and redeemable preferred shares of approximately $2.7 billion. Upon closing of the transaction, Synnex shareholders will own approximately 55 per cent of the combined entity, with Apollo Funds owning approximately 45 per cent.
Hume will lead the combined company as CEO; Polk will be executive chair of the board of directors and will take an active role in business strategy and integration.
The transaction is expected to close in the second half of 2021, pending customary closing conditions.
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