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Tech Data CEO: Why We’re Buying Avnet Technology Solutions

Why is Tech Data Corp. acquiring Avnet Technology Solutions for $2.6 billion from Avnet? Tech Data CEO Bob Dutkowsky explained the deal to ChannelE2E moments ago.

The quick-hit interview…

ChannelE2E: What does Tech Data gain from this deal?

Dutkowsky: “It gives us so much. We want to build on our vision as a truly end-to-end player. To do that, you have to bring technology from the desktop to the data center and all the way to the cloud. You need to secure all of that. And you need to interconnect with the Internet of Things. Plus, you’ve got to deliver data analytics and the right services to the channel. We’ve been building that out over the past decade or so. As we looked toward the future, we wanted to build that out even more.”

The net result, he says: Historically known as a “broadliner” distributor, Tech Data’s value-added business has also gotten to be very large in recent years, he adds. The ATS acquisition further empowers Tech Data with deeper vendor relationships in the data center. “ATS completes the puzzle for us,” he says. Once the deal closes, Tech Data will scale to $35 billion in sales from $26 billion in sales — while pushing into additional markets like Asia.

ChannelE2E: How long have Tech Data and Avnet been discussing the potential ATS deal?

Dutkowsky: “It’s been in the works for almost a year.” Dutkowsky and the Tech Data team sounded relieved that rumors about the negotiations and resulting deal never leaked into the press ahead of this morning’s official announcement.

The deal, pending regulatory approval, is expected to close in the first half of 2017. In the meantime, Dutkowsky says, “it’s business as usual” at Tech Data.

> Related: Will Tech Data StreamOne and Avnet Cloud Marketplace combine into one platform?

For ChannelE2E’s complete coverage of mergers and acquisitions involving VARs, MSPs, CSPs and channel vendors, visit ChannelE2E Milestones.

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8 Comments

Comments

    David Ochser:

    Great acquisition by Tech Data. Both powerhouses now combined… Unbeatable!

      Joe Panettieri:

      Hey David: We’ll be watching to see how the ATS business transitions to Tech Data. The actual deal won’t be official until sometime in the first half of 2017 — assuming it receives regulatory approval. Avnet will need to make sure ATS employees remain loyal to the business ahead of the business unit’s transition to Tech Data ownership.
      -jp

    Jay McBain:

    After Ingram earlier in the year and TD/ATS now…have we seen the end of Disty M&A in 2016?

    Joe Panettieri:

    On the VAR-Telco convergence front, ScanSource buyout of Intelisys (August 2016) attracted a lot of readership as well.
    -jp

    Amy Luby:

    Over the last few years Avnet was the most relevant services distribution competitor to IM while TD and Synnex really struggled to compete. This TD/ATS deal makes Synnex almost irrelevant unless they’ve got something brewing for acquisition. This is exciting and fun to watch!

    Mike:

    Amy, I think you are forgetting about Arrow.

      Joe Panettieri:

      Mike: You raise a good point about Arrow. I failed to mention them in our coverage of the Tech Data-ATS deal and will be sure to keep them in mind.

      Best,
      -jp

    Amy Luby:

    I forget a lot of things Mike 🙂 You’re right though, ARROW is a force to be reckoned with; always has been.

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