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Tech Data Buys Avnet Technology Solutions for $2.6bn

Agreement Deal Acquisition

Tech Data Corporation has today announced that it has entered into a definitive agreement to acquire the Technology Solutions business from Avnet for $2.4 billion in cash and 2.785 million shares of Tech Data common stock, in a transaction valued at approximately $2.6 billion.

Tech Data also expects to realize approximately $200 million in present value of tax benefits.

The combination provides increased capabilities and expanded reach across technologies and geographies to establish Tech Data as one of the world’s most diverse end-to-end global IT distributors with operations in 35 countries.

The transaction is expected to be significantly accretive to Tech Data’s non-GAAP earnings per share in the first year after closing. Tech Data expects to achieve annual cost savings of approximately $100 million within two years after closing, primarily from efficiencies related to technology platforms, as well as duplicative functions and corporate expenses.

“We are excited to announce this transformative transaction, which creates a premier global IT distributor with the most diverse end-to-end solutions from the data center to the living room,” said Bob Dutkowsky, chief executive officer of Tech Data. “This combination complements our value-added distribution capabilities in Europe and the Americas, while establishing Tech Data’s presence in Asia-Pacific, which will be a new market for us. As a result of the enhanced value proposition created through this transaction, Tech Data will be even better positioned to capture opportunities in next-generation technologies, deliver differentiated value to our customers and vendor partners, support career development for our employees, and generate strong returns for our shareholders. We believe the strategic and financial benefits resulting from this transformative combination are compelling for both our company and our stakeholders. We look forward to welcoming the Technology Solutions team to the Tech Data family and are excited about the future opportunities ahead.”

Patrick Zammit, president of the Technology Solutions business, said, “Industry standardization, innovation and converging technologies have transformed our industry. The broader portfolio created through this combination will enable both businesses to better capitalize on these trends, while also providing new opportunities for Technology Solutions to optimize and expand its offering, as well as unlock value in ways we could not historically. Given the strength of our customer and vendor relationships, our common cultures and values, as well as the skilled and engaged teams at both businesses, I am confident that this is a winning combination.”