Tech Data To Buy Technology Solutions From Avnet To Widen Value-Added Distribution Business

Tech Data Corporation

revealed that it reached a deal with Avnet, Inc.

enabling it to buy the latter's Technology Solutions business to widen its value-added distribution business. The transaction comprises cash component of $2.4 billion and 2.785 million shares of Tech Data resulting in a total value of about $2.6 billion. Tech Data expects the transaction to be accretive to its adjusted EPS significantly in the first full year of operations. The company also sees $100 million cost synergies per year in two years after the closure of the transaction. The company expects to fund the acquisition from cash on hand and debt under its revolving facility. The transaction is expected to be completed by the first half of next year. Commenting on the acquisition, CEO, Bob Dutkowsky, said, "This combination complements our value-added distribution capabilities in Europe and the Americas, while establishing Tech Data's presence in Asia-Pacific, which will be a new market for us." Tech Data is confident of improved value proposition from the transaction since it would better positioned to capture opportunities in next-generation technologies to deliver differentiated value to its customers and vendor partners. The company indicated that the move would enable generate strong returns for its shareholders. While TCD closed at $69.34, AVT finished Friday's regular trading at $39.21.