Broadline distributor Tech Data Corp. has completed the $2.6 billion acquisition of Avnet Inc.‘s Technology Solutions group that it announced last September.
The deal turns Clearwater, Fla.-based Tech Data, which was already one of the biggest names in IT distribution, into a globe-bestriding giant with 14,000 employees serving some 115,000 customers in more than 100 countries.
“This is a momentous day in our company’s history and we are excited to welcome our talented colleagues at [Avnet] Technology Solutions to the Tech Data family,” said CEO Bob Dutkowsky in a press statement. “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.”
Avnet, for its part, emerges from the sale a smaller but more focused distributor of products and services for the emerging Internet of Things and embedded systems markets with a deep pool of cash at its disposal for making acquisitions of its own. The Phoenix-based company made two such strategic purchases last year, of electronic components distributor Premier Farnell plc and Hackster Inc., which operates an online education community for people interested in designing, building, and programming Internet-connected hardware.
“Today marks a critical stage in the transformation of Avnet,” said William Amelio, the company’s CEO, in a separate press release. “We will now be able to focus all of our attention and considerable expertise and scale in supporting our customers at every phase of the product lifecycle with services that offer a time to market advantage. We also have substantial financial resources to further drive our targeted investments in integrated and embedded solutions, IoT and digital platforms to create even more opportunities for makers, entrepreneurs and large manufacturers.”
Tech Data has been working diligently since last fall to reassure Avnet Technology Solutions resellers that the transaction finalized today will not diminish their access to credit or other resources.
“When the transaction takes place, it’s business as usual,” said Marty Bauerlein, Tech Data’s senior vice president of U.S. sales, in an interview with ChannelPro last October. “What you had with Avnet, you’re going to have with us.”
If anything, Dutkowsky suggested in today’s press release, combining Avnet Technology Solutions with Tech Data’s existing assets will deliver entirely new benefits to both former Avnet partners and current Tech Data resellers.
“Together, we will be an even stronger company, capable of doing more for our channel partners than ever before,” he said. “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.”
Also announced today were the members of Tech Data’s post-acquisition senior leadership group. Familiar channel presence Joe Quaglia remains president of the company’s Americas operations under the new management structure.
Tech Data, per its announcement in September, paid Avnet $2.4 billion in cash and 2,785,402 shares of Tech Data stock, representing about 7.3 percent of all shares currently outstanding. The company says it expects to realize approximately $100 million worth of savings within the next 24 months, but to record roughly $150 million worth of one-time expenses along the way, presumably in connection with the elimination of redundant job roles and operating groups.
