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March 22, 2021
The combined company will have approximately $57 billion in estimated pro forma annual revenues and more than 22,000 employees. Its will serve businesses in more than 100 countries across the Americas, Europe and Asia Pacific. Additionally, its portfolio will comprise more than 200,000 product offerings.
Synnex’s Dennis Polk
Dennis Polk, Synnex president and CEO, said the merger “will benefit all our stakeholders.” He cited “accelerated revenue and earnings growth, an expanded global footprint and … significant operating improvements while continuing to create shareholder value.”
Rich Hume, Tech Data CEO, described the deal as “transformational for Tech Data, Synnex and the entire technology ecosystem.”
Hume also said the combined company will benefit from significant financial strength to invest. He pointed to its core growth platform as well as next-generation cybersecurity, cloud, data, and IoT technologies.
Tech Data’s Richard Hume
Their complementary line cards and global distribution platform provide “diversified revenue streams and cross-selling opportunities,” the companies said. This includes bringing “comprehensive everything as a service (EaaS) offerings to the market.”
Tech Data currently is owned by Apollo Global Management affiliates and its co-investors. Under the terms of the agreement, Apollo Funds will get an aggregate of 44 million shares of Synnex common stock. It will also get the refinancing of existing Tech Data net debt and redeemable preferred shares of approximately $2.7 billion.
When the deal closes, Synnex shareholders will own approximately 55% of the combined entity, with Apollo Funds owning approximately 45%.
Keep up with the latest channel-impacting mergers and acquisitions in our M&A roundup.
Hume will lead the combined company as CEO. Polk will be executive chair of the board of directors.
The combined company will have an 11-member board, including Hume, with six individuals appointed by Synnex. Apollo Funds will have board designation rights based on ownership, initially including four total directors, two of whom will be independent.
Expect net optimization and synergy benefits of $100 million in the first year after closing, achieving a minimum of $200 million by the end of the second year, the companies said.
Look for the merger to close in the second half of this year. This is subject to customary closing conditions, including approval by Synnex stockholders and regulatory approvals.
Continue to watch Channel Futures for more on this breaking news, and the future of distribution.
Read more about:VARs/SIs
Contributing Editor, Channel Futures
Christine Horton writes about all kinds of technology from a business perspective. Specializing in the IT sales channel, she is a former editor and now regular contributor to leading channel and business publications. She has a particular focus on EMEA for Channel Futures.
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