Mergers and Acquisitions, IT distribution, Content, Private equity

Synnex-Tech Data Merger Date: Distributors Expect Sept 1 Close


Synnex and Tech Data expect to close their $7.2 billion distribution merger on or about September 1, Synnex says. Private equity firm Apollo Global Management will own roughly 45 percent of the combined business -- which blends traditional technology distribution with cloud marketplaces for channel partners.

All required regulatory approvals to complete the proposed Synnex-Tech Data merger have been completed, Synnex indicates.

The merger arrives roughly two months after private equity firm Platinum Equity acquired Synnex-Tech Data rival Ingram Micro. In that deal, Ingram plans to accelerate its current business strategy under existing executive leadership. In stark contrast, Synnex and Tech Data will need to manage internal business, technology and staff integrations.

Synnex-Tech Data Merger: Five Business Details to Know

Among the key data points to note:

1. Combined Partner Base: More than 150,000 customers (mostly channel partners) and 1,500 vendors across more than 100 countries in the Americas, Europe and Asia-Pacific regions.

2. Combined Ownership Model: Upon closing of the deal, Synnex shareholders will own approximately 55 percent of the combined entity, with Apollo Funds owning approximately 45 percent.

3. Synnex-Tech Data Executive Leadership: Tech Data CEO Rich Hume will lead the combined company as CEO. Dennis Polk will be Executive chair of the board of directors and will “take an active role in the ongoing strategy and integration of the business, among other responsibilities,” the announcement says.

4. Combined Cost Cuts: Net optimization and “synergy benefits of $100 million are expected in the first year after closing, achieving a minimum of $200 million by the end of the second year.” An SEC filing from Synnex indicated that most of the cost savings will involve ERP and e-commerce system automation.

5. Synnex-Tech Data Layoffs?: An FAQ document from Synnex executive management to employees in March 2021 downplayed the risk of potential layoffs.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.