Tech Data and Synnex topple Ingram with $7.2bn merger

Combined company will boast pro-forma revenues of $57bn

Tech Data and Synnex are to merge in a $7.2bn deal that would make them larger than current global distribution top dog Ingram Micro.

The duo today entered into a definitive merger agreement that - upon closing - will see NYSE-listed Synnex shareholders own 55 per cent of the combined entity.

Apollo Global Management - the private equity house that acquired Tech Data for $5.4bn last summer - will own the remaining 45 per cent.

The transaction is valued at around $7.2bn, including net debt.

10 EYE-CATCHING STATEMENTS FROM TECH DATA AND SYNNEX ON THEIR $7.2BN UNION

The deal would seemingly create a new market leader in global distribution.

Scale-wise, Tech Data has had to play second fiddle to Ingram, turning over $37bn in 2019 compared with the $47.2bn hauled in by its rival - which itself was recently acquired by private equity - in its comparative period.

But together, Tech Data and Synnex will boast pro-forma annual revenues of around $57bn, employing around 22,000 staff.

Tech Data CEO Richard Hume (pictured) will become CEO of the new company.

"This is transformational for Tech Data, SYNNEX and the entire technology ecosystem. Together, we will be able to offer our customers and vendors exceptional reach, efficiency, and expertise, redefining the experience and value they receive," he said.

"The combined company will also benefit from significant financial strength to invest in its core growth platform as well as next generation cybersecurity, cloud, data, and IoT technologies, which are experiencing explosive growth due to work from home and return to office trends."

Synnex president and CEO Dennis Polk - who will be executive chair of the combined company - claimed the transaction will spark "accelerated revenue and earnings growth".

Focused on its home US market, Synnex turned over $24.7bn in its fiscal 2020, with $20bn coming from technology solutions and $4.7bn from its recently spun off Concentrix arm.

With Tech Data added into the mix, the combined company will serve 100 countries, 150,000 customers and more than 1,500 vendors.

Some $34.8bn of its pro-forma revenues are from the Americas, with EMEA generating $20bn of the total and APAC $3bn.

The transaction is expected to close in the second half of calendar year 2021.