Tech Data's acquisition of global distributor Avnet's US$9.65 billion Technology Solutions business has officially completed. The closure of the US$2.6 billion deal, announced earlier this week, will boost US-based Tech Data's share of overall revenue coming from the data centre from just 29 percent to 45 percent while more than doubling operating income after cost savings.
Tech Data also unveiled a new, six-person global operations team reporting to chief operating officer Rich Hume comprised of three Tech Data and three Avnet TS leaders. Hume and Tech Data's existing top financial, human resources, legal and information leaders will remain with the company and continue reporting to Tech Data chief executive Bob Dutkowsky.
The three Avnet TS executives joining the team are: Patrick Zammit, formerly Avnet TS' global president, who is now president of Tech Data Europe; William Chu, Avnet TS' Asia-Pacific president, who is now president of Tech Data Asia-Pacific; and Jaideep Malhotra, Avnet's senior vice president of global computing components, who will become president of global computing components for Tech Data.
Tech Data didn't have any Asia-Pacific presence prior to acquiring Avnet and said in January that European president Nestor Cano would be leaving the company on 1 April.
The three leaders tapped from the Tech Data side are: Joe Quaglia, Tech Data's president of the Americas, who will remain in his current role; Els Demeester, Tech Data's managing director of Benelux, who is now corporate vice president of integration; and Michael Urban, Tech Data's European senior vice president of broadline, consumer electronics, services and procurement, who is now corporate vice president of strategy, transformation and global vendor management.
All told, the post-acquisition Tech Data will have 14,000 employees in 40 countries serving some 115,000 customers in more than 100 countries. Following the departure of TS, Avnet is now a pure-play semiconductor distributor.
"We have doubled down on our electronic components and integrated and embedded solutions business," Avnet chief executive Bill Amelio said in a statement. "We wish our former Technology Solutions' employees well as they start a new and successful chapter of their business history with Tech Data."
Under the terms of the agreement, Avnet has received 2.785 million shares of Tech Data common stock worth about $200 million and representing roughly a 7.3 percent ownership stake. Avnet has agreed not to transfer any of its shares of Tech Data's common stock for the first 180 days after closing.
Tech Data shares dipped 12 cents, or 0.1 percent, to US$88.52 since the closing was announced, while Avnet shares dropped 28 cents, or 0.6 percent, to US$46.27. Tech Data expects to achieve annual cost savings of roughly $100 million within two years of closing due to technology platform efficiencies as well as duplicative functions and corporate expenses.