Synnex (SNX) - Get Report shares rose on Monday after the call-center operator and tech-hardware distributor agreed to merge with New York private-equity firm Apollo Global Management's Tech Data unit, a deal valued at $7.2 billion including debt.
Shares of the Fremont, Calif., company at last check rose 6.2% to $109.64. Shares of Apollo Global were 0.9% higher at $47.73.
Tech Data is the Clearwater, Fla., technology distributor for companies like Apple (AAPL) - Get Report and Cisco (CSCO) - Get Report. Apollo acquired Tech Data in 2020 in a deal valued at about $6 billion.
Terms of the current deal call for Synnex to issue 44 million shares to Apollo affiliates, and refinance Tech Data's current net debt and redeemable preferred shares, the two companies said.
The deal would give Synnex holders 55% and Apollo affiliates 45% of the combined company.
The combination will speed revenue and earnings growth, expanded the new company's global footprint, and improve operations while providing value for holders, Dennis Polk, Synnex's president and chief executive, said in a statement.
The move gives the new company the financial strength to invest in its core platform as well as next-generation cybersecurity, cloud, data, and [internet-of-things] technologies, which are growing strongly "due to work-from-home and return-to-office trends," added Rich Hume, Tech Data's CEO.
The deal should boost adjusted earnings per share more than 25% in the first year after closing, the two companies said.
Annual pro-forma revenue is $57 billion. The new company will employ 22,000.
At closing Hume will lead the combined company as CEO and join the board. Polk will be executive chairman.
MiTAC Holdings and affiliates, which held 17% of Synnex as of Jan. 22, have agreed to vote in favor of the transaction, the companies said.
The companies expect to close the deal in the second half of calendar 2021, subject to conditions including regulatory clearances and a vote of Synnex holders.