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SYNNEX to acquire large chunks of Westcon-Comstor

American distributor SYNNEX Corporation and South African group Datatec have unveiled a definitive agreement in which SYNNEX will acquire Datatec's Westcon-Comstor Americas business and become a minority shareholder in Datatec's Westcon EMEA and APAC businesses. "We believe this is a unique opportunity that is transformational to SYNNEX and is aligned to our strategy of positioning the business to where technology is growing. Westcon-Comstor is a recognized leader in the security, UCC and networking space", stated Kevin Murai, President and CEO of SYNNEX Corp. "The Westcon-Comstor brand has been built over time by a very deep and talented team and we are excited to welcome the Americas team to our family."

Jens Montanana, CEO of Datatec, stated: "I'm proud of our team and the business they have built over the past thirty years. The SYNNEX culture is similar to Westcon-Comstor and I'm excited about the opportunity to grow our businesses together on a global scale. We share a common vision and strategic objective in addressing the global complexities and emerging demands facing our partners."

Here are the transaction details and the impact of the acquisition to Consolidated SYNNEX Corporation Financials:

  • €460M in stock and €90M in cash at closing
  • Up to €185M earn out if certain financial targets are achieved through Feb 2018 – which will allow Datatec to own about 10% of SYNNEX
  • €27.7M for 10% ownership of Datatec's Westcon EMEA and APAC businesses (with an option to double that ownership, although no details have been unveiled on how and when). Synnex also gets first refusal on making an offer to acquire it in its entirety if Datatec ever looks to sell the remainder of the business in the future, out of which Datatec wishes to get better value in the future, once the (difficult as usually) SAP implementation in the region is achieved.
  • Approximately €106 million of net debt will be assumed and refinanced with the close of the transaction
  • Option to pay all cash, based on the average share price at closing
  • If stock is issued, the SNX Board of Directors will appoint Jens Montanana to the SYNNEX Board of Directors, subject to compliance with legal and regulatory requirements

"We are pleased to welcome a long-term shareholder like Datatec Ltd. The ownership structure serves us well as it aligns our collective long-term goals", stated Kevin Murai, President and CEO of SYNNEX Corp. "The composition of this transformative acquisition enables SYNNEX to further invest in long-term strategies to grow and diversify our business. Mr. Montanana brings to our board deep practical knowledge in doing business beyond North America."

For its fiscal year end ended February 28, 2017, the Westcon Americas business generated approximately €2B of revenue and approximately €82m in EBITDA. In the first 12 months after close, the Westcon Americas business, excluding integration costs, transaction expenses and intangible amortization, is expected to be mildly accretive to SYNNEX Non-GAAP EPS and then accelerate in year two. The transaction is expected to close in the third calendar quarter of 2017, subject to the satisfaction of regulatory requirements and customary closing conditions. Until the transaction is completed, the companies will continue to operate independently.

Tech Data expands its partnership with Lenovo

Portugal: already a Lenovo partner, broadliner Tech Data is now authorized to distribute the full Personal Computing and Smart Devices lines of products of the Chinese vendor (source: Ntech News Portugal).

News from CMS Distribution, Entatech, Midwich and ProVu

British Isles: UTM vendor Barracuda has signed up storage VAD CMS Distribution to help it reach more MSPs across Ireland and the United Kingdom with the distributor offering cloud security and data protection.

Unsecured creditors of brankrupt broadliner Entatech are set to receive around two-thirds of their money back. According to documents published by Companies House, the administrators show that Entatech’s unsecured creditors are owed just over €11.3m by the Telford-based outfit, and there is €7.3m to pay them off. Of the €11.3 million, €8 million is owed to unsecured trade creditors. This figure includes Microsoft which is owed just over €1.4m.

AV broadliner Midwich has announced that Nathan Rogers has been internally appointed as the Group’s NEC Business Development Manager, having formerly been part of the Midwich Technical team. Nathan’s appointment reflects the exceptional rate of growth within the IT and AV industry as customers become increasingly reliant upon Midwich Group’s specialist knowledge and expertise to provide high quality AV solutions.

Telecom VAD ProVu has bid farewell to its long-standing Sales Director and Founder, Ian Godfrey, as he retired from the company. In a career spanning 18 years, Ian has become a well-known figure in the Channel. Having established ProVu back in 1999, he has played a tremendous role in the development of the company, helping to build their reputation as leaders in the field of VoIP hardware distribution (source: Microscope United Kingdom, Channel Eye United Kingdom, Comms Business United Kingdom).

Azlan becomes Microsoft CSP

India: infrastructure VAD Azlan + Technology Solutions has started to deliver Microsoft's entire Cloud portfolio, inclusive of Azure, SaaS and PaaS, to their channel partners across India via the Microsoft Cloud Solution Provider (CSP) program. This builds upon the successful relationship between Microsoft and Technology Solutions in Australia and recent signing in Vietnam, and will enable partners in India to build profitable businesses in the cloud and create more recurring revenue. "This is the next step in turning our vision to be the leader in next-generation technology distribution into reality", said Naresh Desai, vice president specialist business Asia Pacific at Tech Data. "Powered by an industry pioneer like Microsoft, our portfolio of cloud solutions will enable our partners to embrace new consumption models, transform IT and drive business growth."

"As the need for a robust, yet affordable, IT infrastructure rises, cloud computing presents a significant value proposition to customers and service providers", said Sundaresan Kanappan, country general manager India at Tech Data/Azlan. "This strategic collaboration will focus on every client's specific compute needs whilst providing them the flexibility and opportunity to scale their businesses."< +p>

"We are extremely excited to partner with Technology Solutions", said Manish Sharma, lead SMB Business for Microsoft India. "Businesses in India recognize the transformative power of technology and see it as an enabler of change. The combination of Microsoft's cloud offerings and Technology Solutions' reach across India, will accelerate cloud adoption in India and enable the digital transformation of businesses."

Cloud computing holds tremendous potential for enterprises looking to accelerate sales and revenue without having to rely on their own IT resources. Microsoft Cloud Solutions enable partners to offer their customers access to enterprise-level IT at affordable price points. This partnership will help customers adopt a robust cloud architecture and service model, leapfrogging the traditional investment in enterprise IT. Azlan – Technology Solutions has a strong presence in India, where it is expanding its portfolio of services to include customized cloud solutions for businesses across industry verticals, including retail, logistics, manufacturing, banking and financial services, public sector and education, and more. Utilizing their technical expertise, market knowledge and trusted business relationships, paired with Microsoft's industry-leading solutions, Technology Solutions provides partners with new opportunities and ongoing channel support, including training, enablement, lead generation, co-marketing, technical integration and services (source: IT VAR News India).

New brands for ELKO, Grafitec and Merlion

Russia: broadliner ELKO has added HIKvision video-security systems to its catalog1. Consumer electronics specialist Grafitec has become an official distributor for Energizer batteries2 and UBtech smart robotics3 in the country. Finally, broadliner Merlion has been named exclusive distributor by accessory and small peripheral specialist A4Tech (source: CRN Rossiya 1, 2 and 3, Astera Rossiya).