CLEARWATER — Tech Data, once the largest publicly traded company in the region, has merged with a California company in a deal that, after closing, will create a $57 billion global tech services giant.
The merger is with Fremont, Calif.-based Synnex Corp., a Fortune 200 corporation that handles distribution, systems design and integration services for the technology industry for a wide range of enterprises, according to a statement. The transaction is valued at approximately $7.2 billion, including net debt, the release adds. The combined companies, the release states, with more than 22,000 employees, “will provide customers and vendors with expansive reach across products, services, and geographies to accelerate technology adoption.”
Founded in 1974, Clearwater-based Tech Data posted $33.6 billion in revenue in 2018, up from $24.19 billion in 2017. Funds managed by private equity firm Apollo Global Management Inc. acquired the company in 2019 for $5.4 billion. Under the terms of the new merger agreement, Apollo Funds 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 about $2.7 billion, the release states. Upon closing of the transaction, Synnex shareholders will own approximately 55% of the combined entity, with Apollo Funds owning approximately 45%.
Tech Data CEO Rich Hume will lead the combined company as CEO, the release states. Synnex President and CEO Dennis Polk will be Executive Chair of the board and will take an active role in the ongoing strategy and integration of the business, among other responsibilities, the release adds. The combined company will have an 11-member board, including Hume, with six individuals appointed by Synnex and with Apollo Funds to have board designation rights based on ownership, initially including four total directors, two of whom will be independent.
"We are excited to partner with a world-class industry leader like Tech Data and believe that this combination will benefit all our stakeholders," Polk says in the statement. "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. 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."
"This is transformational for Tech Data, Synnex and the entire technology ecosystem. Together, we will be able to offer our customers and vendors exceptional reach, efficiency, and expertise, redefining the experience and value they receive," Hume adds in the release.
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, the release states. The transaction is expected to close in the second half of 2021, subject to customary closing conditions, including approval by Synnex stockholders and regulatory approvals. MiTAC Holdings Corp. and its affiliates, which collectively owned about 17% of Synnex shares as of Jan. 22, have agreed to vote their shares in favor of the transaction, the release states. Until the transaction is completed, the companies will continue to operate independently.