Tech Data Completes Acquisition of Avnet’s Technology Solutions Business
February 27 2017 - 11:00AM
Creates Premier Global IT Distributor with the
Most Diverse End-to-End Solutions from the Data Center to the
Living Room
Tech Data Corporation (NASDAQ:TECD) today announced it has
completed its acquisition of the Technology Solutions business from
Avnet, Inc. (NYSE:AVT). The combination creates a premier global
end-to-end IT distributor with unmatched capabilities and the most
diverse solutions from the data center to the living room.
“This is a momentous day in our company’s
history and we are excited to welcome our talented colleagues at
Technology Solutions to the Tech Data family,” said Bob Dutkowsky,
chief executive officer of Tech Data. “Our combined company is
perfectly positioned at the epicenter of the IT ecosystem—with the
scale and scope to serve dynamic markets throughout the
world—giving our customers access to an end-to-end portfolio of IT
solutions and efficiently bringing our vendors’ products to new
customers in more markets. Our organizations’ common cultures,
shared values and commitment to providing a world-class customer
experience will serve as the foundation for the new Tech Data.
Together, we will be an even stronger company, capable of doing
more for our channel partners than ever before. We remain confident
that the acquisition of Technology Solutions creates a winning
combination for our customers, vendors, and shareholders, as well
as the employees of both organizations.”
The addition of Technology Solutions
significantly broadens Tech Data’s value-added distribution
business, increasing the company’s ability to help its partners
capitalize on next-generation technologies while enhancing its
go-to-market capabilities with complementary skills, expanded
vendor relationships, and new customer sets. The combined company
has a larger and more balanced geographic footprint, including a
presence in the Asia-Pacific region, a new market for Tech Data.
The company has operations in 40 countries, with 14,000 employees
serving approximately 115,000 customers in more than 100
countries.
The company also announced its global executive
leadership, as well as several new regional and global roles.
Reporting to CEO Bob Dutkowsky are:
- Chuck Dannewitz, executive vice president, chief financial
officer
- Rich Hume, executive vice president, chief operating
officer
- Beth Simonetti, executive vice president, chief human resources
officer
- John Tonnison, executive vice president, chief information
officer
- David Vetter, executive vice president, chief legal
officer
Reporting to COO Rich Hume are:
- William Chu, president, Asia-Pacific
- Jaideep Malhotra, president, Global Computing Components
- Joe Quaglia, president, Americas
- Patrick Zammit, president, Europe
- Els Demeester, corporate vice president, Integration
- Michael Urban, corporate vice president, Strategy,
Transformation and Global Vendor Management
Financial TermsThe total
purchase price at close was approximately $2.6 billion (subject to
certain post-close adjustments), including $2.4 billion in cash,
and 2,785,402 shares of Tech Data stock, representing approximately
7.3 percent of Tech Data’s shares outstanding (after issuance of
the new shares). Tech Data financed the cash portion of the
purchase price through a combination of $1.0 billion from its
recent public debt offering and $1.0 billion of bank term loans,
and the remainder from drawings under other credit facilities and
cash on hand.
The transaction is expected to be significantly
accretive to Tech Data’s non-GAAP earnings per share in the first
full year. The company expects to achieve annual cost savings of
approximately $100 million within 24 months, with one-time costs to
achieve these cost savings expected to be approximately $150
million.
For more information on today’s announcement,
please visit www.techdata.com/tdts.
About Tech DataTech Data
Corporation is one of the world’s largest wholesale distributors of
technology products, services and solutions. Its advanced logistics
capabilities and value added services enable 115,000 resellers to
efficiently and cost effectively support the diverse technology
needs of end users in more than 100 countries. Tech Data generated
$26.4 billion in net sales for the fiscal year ended January 31,
2016. It is ranked No. 108 on the Fortune 500® and one of Fortune’s
“World’s Most Admired Companies.” To learn more, visit
www.techdata.com, or follow us on Facebook and Twitter.
Forward-Looking
StatementsCertain statements in this communication may
contain “forward‑looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. These
statements, including statements regarding Tech Data’s plans,
objectives, expectations and intentions relating to the acquisition
of Avnet’s technology solutions business (“Acquisition”), the
Acquisition’s expected contribution to Tech Data’s results, the
expected benefits of the Acquisition, Tech Data’s and the Acquired
Business’ financial results and estimates and/or business prospects
involve a number of risks and uncertainties and actual results
could differ materially from those projected. These forward‑looking
statements are based on current expectations, estimates, forecasts,
and projections about the operating environment, economies and
markets in which Tech Data and the Acquired Business operate and
the beliefs and assumptions of our management. Words such as
“expects,” “anticipates,” “targets,” “goals,” “projects,”
“intends,” “plans,” “believes,” “seeks,” “estimates,” variations of
such words, and similar expressions are intended to identify such
forward‑looking statements. In addition, any statements that refer
to projections of Tech Data or the Acquired Business’ future
financial performance, our anticipated growth and trends in our
businesses, and other characterizations of future events or
circumstances, are forward‑looking statements. These
forward‑looking statements are only predictions and are subject to
risks, uncertainties, and assumptions. Therefore, actual
results may differ materially and adversely from those expressed in
any forward‑looking statements.
For additional information with respect to risks
and other factors which could occur, see Tech Data’s Annual Report
on Form 10-K filed on January 31, 2016, including Part I, Item 1A,
“Risk Factors” therein, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K and other securities filings with the
Securities and Exchange Commission (the “SEC”) that are available
at the SEC’s website at www.sec.gov and other securities
regulators. Readers are cautioned not to place undue reliance upon
any such forward-looking statements, which speak only as of the
date made. Many of these factors are beyond Tech Data’s control.
Unless otherwise required by applicable securities laws, Tech Data
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. Tech Data undertakes no duty to
update any forward‑looking statements contained herein to reflect
actual results or changes in Tech Data’s expectations.
Contacts
Investors/Analysts:
Chuck Dannewitz
Executive Vice President and Chief Financial Officer
(727) 532-8028
chuck.dannewitz@techdata.com
Arleen Quinones
Vice President, Investor Relations and Corporate Communications
(727) 532-8866
arleen.quinones@techdata.com
Media:
Brian Kosoy
Director, Corporate Communications
(727) 299-8865
brian.kosoy@techdata.com
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