Synnex and Tech Data have entered into a definitive merger agreement valued at approximately $7.2 billion. The combined company, with approximately $57 billion in estimated annual revenues and a team of over 22,000 people, is expected to enjoy economies of scale necessary in the hyper-competitive distribution environment.
“Together, we will be able to offer our customers and vendors exceptional reach, efficiency, and expertise, redefining the experience and value they receive,” said 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.”
The combined company will have a global footprint that serves more than 100 countries across the Americas, Europe and Asia-Pacific regions, and a broad, diversified portfolio of more than 200,000 product and solutions offerings. Such scale is expected to provide increased value and purchasing efficiencies to the combined company’s 150,000 customers and more than 1,500 vendors. Technology product segments include cloud, data centers, security, Internet of Things (IoT), services, 5G, and intelligent edge.
“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,” said Synnex president and CEO Dennis Polk. “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.”
Under the terms of the agreement, Tech Data owner, Apollo Funds, a New York private equity firm, 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% of the combined entity, with Apollo Funds owning approximately 45%.
Rich Hume will lead the combined company as CEO. Dennis Polk will be Executive Chair of the Board of Directors and will take an active role in the ongoing strategy and integration of the business, among other responsibilities.
The agreement creates a global solutions aggregator with significant breadth and depth of capabilities.