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Tech Data completes acquisition of Avnet’s Technology Solutions business

American broadliner Tech Data has completed its acquisition of the Technology Solutions business from its competitor Avnet. 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 (aka Azlan), 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

In Europe, Tech Data has also announced its European Executive Board, which will be led by Zammit:

  • Alain Amsellem – senior vice president and chief financial officer, Europe
  • Michael Dressen – senior vice president and regional managing director, Germany and Austria (a region where Barbara Koch, Managing Director TD Azlan Germany & Austria, becomes manager of both Azlan and Avnet TS local offices)
  • Jonas Elmgren – senior vice president and regional managing director, GEO (that is, other European countries where Tech Data operates: Bulgaria, Croatia, Czech Republic, Denmark, Finland, Hungary, Italy, Norway, Poland, Portugal, Romania, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland and Turkey)
  • Andy Gass – senior vice president and regional managing director, United Kingdom and Ireland (a region where Rob Tomlin, Managing Director TD Azlan UK, becomes manager of both Azlan and Avnet TS local offices)
  • Pascal Murciano – senior vice president and regional managing director, France
  • Miriam Murphy – senior vice president and regional managing director, Benelux
  • Stephen Nolan – senior vice president, Broadline, Mobile and Services
  • Johan Vandenbussche – senior vice president, Operations
  • Graeme Watt – senior vice president, Value (includes the combined businesses of Azlan and Technology Solutions, specialist brands Datech and Maverick, along with Tech Data Cloud and Tech Data Smart for IoT)
  • Simon England – senior vice president, Next Generation Technology (includes cloud, big data – analytics and cognitive, IoT, security, education and services)
  • Carlos Arcusa – vice president, Human Resources
  • Michael Fischermanns – vice president, Information Technology
  • Hugo Graça – vice president, Global Computing Components EMEA
  • Roman Rudolf (former MD of Avnet TS in Germany) – vice president, Integration

Financial Terms

The total purchase price at close was approximately €2.35 billion (subject to certain post-close adjustments), including €2.17 billion in cash, and 2,785,402 shares of Tech Data stock, representing approximately 7.3% 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 €900 million from its recent public debt offering and €900 million 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 €90 million within 24 months, with one-time costs to achieve these cost savings expected to be approximately €135 million.