The combined company will have estimated pro forma annual revenues of nearly $57bn
Synnex and Tech Data have agreed to merge in a deal valued at nearly $7.2bn to create a major global distributor of IT solutions.
The consideration includes the net debt of Tech Data.
Based in California, Synnex provides distribution, systems design, and integration services for the technology industry.
Tech Data offers product lines, logistics capabilities, and value-added services to help technology manufacturers and resellers in deploying IT solutions.
Based in Florida, the company is fully-owned by funds managed by affiliates of Apollo Global Management and their co-investors.
The combination of Synnex and Tech Data will have estimated pro forma annual revenues of around $57bn. It will have a workforce of more than 22,000 people to offer expansive reach to customers and vendors across products, services, and regions to speed up technology adoption.
The enlarged firm will serve over 100 countries, spanning the Americas, Europe, and Asia-Pacific regions. It will have a diversified portfolio of over 200,000 product and solutions offerings to cater to 150,000 customers and more than 1,500 vendors.
Synnex president and CEO Dennis Polk said: “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.”
As per the terms of the deal, Apollo Funds will be issued 44 million shares of Synnex along with the refinancing of the existing net debt of Tech Data and redeemable preferred shares of around $2.7bn.
Post-merger, Synnex’s shareholders will hold nearly 55% stake in the combined entity, while Apollo Funds will own the remaining 45% stake.
Tech Data CEO Rich Hume said: “Together, we will be able to offer our customers and vendors exceptional reach, efficiency, and expertise, redefining the experience and value they receive.
“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.”
Rich Hume will be the CEO of the combined company.
The deal is anticipated to be completed in the latter half of this year, subject to customary closing conditions such as Synnex’s stockholders’ approval and regulatory approvals.