Avnet sells Solutions business to Tech Data for $2.6bn
Shake up in global IT distribution market continues after the Chinese Ingram Micro acquisition
Avnet is selling its Technology Solutions operating group to Tech Data Corporation in a stock and cash transaction valued at approximately $2.6 billion.
Under the terms of the agreement, Avnet will receive $2.4 billion in cash and 2.8 million shares of Tech Data common stock, currently valued at around $200 million.
The sale of the business “provides both Avnet and Tech Data with immediate opportunities to focus on core strategies” and “scale their respective businesses – ultimately delivering greater profitability to their shareholders”, said the two companies.
William Amelio (pictured), new chief executive officer of Avnet, said: “We believe the acquisition of Technology Solutions by Tech Data is the best decision for our employees, customers, suppliers and shareholders.
“This transaction presents us with the best strategic path for Avnet’s future success and profitability, and puts Technology Solutions in position to achieve breakthrough business results with Tech Data.”
Amelio added: “Moving forward, Avnet will focus its resources and investments on becoming a leader in design chain and supply chain services not only for our current customers and suppliers, but also for new markets.
“We will drive targeted investments in embedded solutions, the Internet of Things (IoT) and critical digital platforms. By investing in these high growth areas, we can expand the breadth of our portfolio and attract new customers worldwide who depend on us to deliver world-class solutions.”
Avnet’s Technology Solutions operating group is a global IT solutions distributor serving customers and suppliers in more than 80 countries. It provides next generation solutions, marketing, training, resources and services. Technology Solutions works in partnership with value-added resellers.
“This transformative transaction will position us as a premier global IT distributor with the most diverse end-to-end solutions from the data centre to the living room,” said Bob Dutkowsky, chief executive officer of Tech Data.
“Tech Data has competed with and admired Avnet Technology Solutions for many years. We’re thrilled to start this journey together and are confident that our customers, vendor partners, employees and shareholders will appreciate and benefit from the value that we will bring to the market. We look forward to welcoming the Technology Solutions team to Tech Data.”
Avnet and Tech Data say they intend to partner on delivering “world class IoT end-to-end solutions to the market” after the deal, expected to be completed in the “first or second quarter of calendar 2017”, they said.
The deal comes as rival global distributor Ingram Micro is being taken over by a Chinese conglomerate.
@AntonySavvas