Monday Morning Impact – January 27

Wesco and Anixter Announce Merger Agreement

Wesco International, Inc. and Anixter International Inc. have announced a board agreement under which Wesco will acquire Anixter in a transaction valued at approximately $4.5 billion. Anixter’s prior agreement to be acquired by Clayton, Dubilier & Rice, LLC (“CD&R”) has been terminated, following CD&R’s waiver of its matching rights under the agreement.

Wesco is a Pittsburgh-based provider of electrical, industrial, and communications MRO and OEM products, construction materials, advanced supply chain management and logistics services.  Anixter, based in suburban Chicago, is a global distributor of network, security, electrical, electronic, and utility power solutions.

Under the terms of the agreement, each share of Anixter common stock will be converted into the right to receive $70.00 in cash (subject to increase as described below), 0.2397 shares of Wesco common stock and preferred stock consideration valued at $15.89, based on the value of its liquidation preference. It is anticipated that Wesco stockholders will own 84%, and Anixter stockholders 16%, of the combined company.

The combined company will have pro forma 2019E revenues of approximately $17 billion and will be a leading electrical and data communications distributor in North America. With an extensive global reach and increased international exposure, approximately 12% of revenues will be generated outside of North America. The increased scale will enable the combination unites Wesco’s capabilities in industrial, construction, and utility with Anixter’s expertise in data communications, security, and wire and cable.

“The transformational combination of Wesco and Anixter will create a premier electrical and data communications distribution and supply chain services company,” said John Engel, Wesco’s chairman, president and CEO. “With increased scale and complementary capabilities, we will be ideally positioned to digitize our business, expand our extensive services portfolio and supply chain offerings, and deliver solutions to our customers whenever and wherever they need them around the globe.”

The transaction is subject to Anixter stockholder approval, receipt of regulatory approval in the United States, Canada, and certain other foreign jurisdictions, as well as other customary closing conditions. Completion of the transaction is anticipated during the second or third quarter of 2020.

Channel Impact^®
Complementary products, services, technologies, and solutions are expected to create significant cross-selling opportunities, strengthening the combined company’s customer value proposition and supplier relationships.

Synnex Announces Plan to Separate into Two Public Companies

Synnex has announced its plan to separate into two publicly traded companies, comprising of Synnex Technology Solutions in the distribution function and Concentrix, a global CX solutions company. Immediately following the transaction, Synnex shareholders will own shares of both Synnex and Concentrix.

“The spin-off will provide each company with sharper strategic and managerial focus and enable SYNNEX shareholders to own and value each business separately,” said Synnex president/ CEO Dennis Polk.  “We are very proud of our company and the returns we generated by investing in IT Distribution and CX Services over our nearly 40-year history. We are equally proud to have these two businesses reach a point where they are industry leaders and positioned well to be successful standalone public companies.”

Polk will continue to hold this position following the separation. Chris Caldwell, president of Concentrix, will lead Concentrix as president and CEO. Completion of the transaction is expected in the second half of 2020. A shareholder vote will not be required.

Channel Impact^®
The separation of the two businesses is expected to enhance each company’s competitive position and accelerate significant value creation opportunities.

Nextiva Launches New Marketing Program

Nextiva has rolled out CoNEXtion, a new marketing program for partners intended to deliver quality lead syndication and more than a dozen demand generation tools.

As part of the value proposition, the Scottsdale, Arizona-based communications platform company, has integrated a variety of other features such as MDF, campaigns-in-a-box, co-branded collateral, email automation and landing page generator, social content syndication, events support, sales incentives/promotions, and access to field marketing managers.

“CoNEXtion is the culmination of years of observing what works and what doesn’t in the channel,” said MeiLee Langley, Nextiva’s director of channel marketing. “Many of our partners understand the difference great marketing can make, but many don’t have the time or tools to execute fruitful strategies.”

Channel Impact^®
The program’s suite of tools is designed to empower partners to launch and manage digital, social, and event marketing strategies.