Tech Data snaps up SDG
Parent company SCH waves goodbye to its hybrid history as it sells distribution arms in UK, Netherlands and France to global giant
SCH has agreed to sell its distribution arm SDG to Tech Data for approximately €277m (£219m).
The privately held Birmingham-based technology group, which has a combined turnover of £2.75bn for both SDG and its technology integrator arm SCC, has been the subject of numerous takeover rumours this year.
Under the terms of the deal, which is still subject to EU regulatory authority approval and expected to close in Q4 this year, Tech Data will acquire SDG, IQ Sys and ISI Distribution in the UK, ETC and Best’Ware in France and ETC in the Netherlands.
Tech Data said the acquisition strengthens its enterprise business Azlan, and will add more than 600 experienced individuals with "domain knowledge in specific product, customer and operational disciplines".
Sir Peter Rigby, group chairman and chief executive of SCH, said: “SCH has successfully operated both SDG and SCC for 25 years. With a consolidating channel, the opportunity to maximise our return on investment and deploy a single focused strategy with SCC has become more apparent.
“Having engaged with Tech Data, SCH has come to view the disposal of SDG as a fantastic opportunity where its unique strengths can be better developed within a global parent with distribution as its core focus.
“The deal offers the opportunity to unleash the potential of the next stage of SDG’s evolution and provides unrivalled opportunities for career progression and growth.”
Rigby said the deal will also mean SCH can concentrate on its "core business" of SCC.
“For the first time in the group’s history there is a single focus and concentration on what has always been our core business,” he said. “The deal enables immediate release of capital to bring forward SCC’s next phase of growth.”
He added: “This is an exciting time in the development of our business and it has taken much careful thought and consideration to decide to devolve a part of our business which has been built and created from scratch and driven to international status and acclaim. However, we believe that the timing is right to put SDG into the hands of one of the global players in the intensively competitive segment of distribution which SDG trades in.
"Likewise, we plan to enhance the scale and capability of SCC significantly and to take it to the top rank in its chosen areas of activity. We have chosen to make this fundamental change at a time when the business is in its best shape ever from a group perspective, despite the difficult trading and economic conditions in most of the territories in which we operate.”
James Rigby, SCC’s managing director, added: "Our clear strategy is to position SCC as the technology and cloud solutions partner of choice for mid-sized companies and government organisations. We see huge potential in the market opportunity which sits between global SIs and local players, where there are few quality partners in that space who have our range and depth."
Robert Dutkowsky, chief executive of Tech Data, said: “This transaction demonstrates Tech Data’s strong commitment to our diversification strategy and further expands our enterprise offerings in Europe.
“It adds both breadth and depth to our product and customer portfolios, and creates a comprehensive enterprise solution stack in networking and communications, server and storage and enterprise software across a broader pan-European footprint.
“Our solid balance sheet and strong infrastructure enables Tech Data to make strategic investments such as this that broaden our services and solutions for customers, strengthen our relationship with key vendors and improve overall profitability and returns for our shareholders.”