Huge Tech Distribution Firms Tech Data, SYNNEX Merge In $7B Deal
March 22, 2021 by Dave Haynes
The M&A deal is expected to close in Q3-Q4 and until then, the two will operate as separate companies in a “business as usual” mode.
The transaction is valued at approximately $7.2 billion, including net debt. The combined company, with approximately $57 billion in estimated pro forma annual revenues.
SYNNEX CEO Dennis Polk sent a note out this morning:
As you know, the pace of change within our industry has been accelerating for quite some time, and requires consistently higher levels of innovation, investment, and scale. To that end, we believe that now is the right time to partner with Tech Data and position our combined company for future growth. This combination will enable us to further accelerate the pace of investments and innovation to address your future needs. As a joint company with unparalleled scale, we will be able to provide increased value to your organization, as well as access to a larger network of vendors, products, and geographies.
As with all our prior M&A transactions, we have looked for a partner that is the right fit for our company, and we believe that the combination with Tech Data is compelling for several reasons.
First, we will be able to accelerate our growth trajectory beyond what we could have done by making several smaller acquisitions over a longer time.
Second, given the complementary geographic footprints between us and Tech Data, we immediately gain a truly global presence with which to better serve you when your customers are local, regional, or worldwide.
Third, we can further expand our offering and provide you a bigger and more robust portfolio of products, solutions, and services.
Lastly, both SYNNEX and Tech Data share strong, values-driven cultures, which we expect to build upon as a joint company of over 22,000 talented associates. We believe this transaction will allow us to provide you with more solutions and capabilities as we look to make increased investments in high-value areas of growth like Hybrid Cloud, Security and Everything as a Service.
I can also share with you that Rich Hume, CEO of Tech Data will be the CEO of the combined company. I will be the Executive Chair of the Board of Directors, with an active role in the ongoing strategy, integration, and Hyve business, among other responsibilities. I look forward to working alongside Rich going forward.
The deal has to be approved by shareholders and regulators.
“We will continue to provide the excellent service that you have become accustomed to and please know that the team supporting you today will remain the same,” adds Polk. “Rest assured that we have a plan for a seamless integration of the two companies in place, and both teams have deep experience in this area.”
Distribution companies are hugely important parts of the digital signage ecosystem, but they kind of operate quietly, doing their thing with vendors. I don’t know that world all that well, but believe the future Tech Data-Synnex entity would collectively be the largest of its kind, jumping past Ingram Micro and Arrow in revenues and employees.
Tech Data had been acquired by a private equity firm about 18 months ago and those money guys – Apollo – are also behind this deal.