Avnet Inc. has sold its Avnet Technology Solutions (ATS) business to Tech Data Corp. for $2.6 billion, the two distributors confirmed this morning. The deal potentially reshapes a major portion of the IT distribution ecosystem -- where Avnet will double-down on emerging supply chain management opportunities, and Tech Data will push deeper into preconfigured data center solutions, training, marketing, and more "value" offerings for partners.
According to Avnet CEO William Amelio:
"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, 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.”
Added Tech Data CEO Bob Dutkowsky:
“This transformative transaction will position us as a premier global IT distributor with the most diverse end-to-end solutions from the data center to the living room,. 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 and are excited for the opportunities that this combination creates.”
Avnet Technology Solutions (ATS) has close working relationships with enterprise-class technology companies -- including Cisco Systems, Hewlett Packard Enterprise, IBM and Oracle.
Both Avnet and Tech Data have hit market turbulence in recent months. Avnet stumbled with an ERP deployment, and changed CEOs in July 2016 after announcing earnings weakness in multiple quarters. Amelio was named interim CEO a few months ago before earning the permanent position in September 2016.
Tech Data, meanwhile, recently delivered weaker-than-expected quarterly results. The main issue involved mobile-oriented sales, though the distributor's networking and security businesses remain strong.
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