When Synnex announced plans to acquire Westcon-Comstor's America business about an hour ago, the deal involved a range of additional details and maneuvers. Here's a look at five facts about Synnex's pending acquisition of Westcon-Comstor Americas.
1. What Is Synnex Acquiring?: Synnex plans to acquire Datatec's Westcon-Comstor Americas business and become a minority shareholder in Datatec's Westcon EMEA and APAC businesses.
2. How Much Will Synnex Pay?: About $800 million though there are several variables and debt assumption. The math looks like this:
- For the Westcon-Comstor Americas businesses, Synnex will pay $500 million in stock and $100 million in cash at closing. Synnex will also pay up to $200 million earn out if certain financial targets are achieved through February 2018.
- For a 10 percent ownership in Datatec's Westcon EMEA and APAC businesses, Synnex will pay $30 million.
- Approximately $115 million of net debt will be assumed and refinanced with the close of the transaction.
Synnex will also have the option to pay all cash, based on the average share price at closing, the companies said. If stock is issued, the SNX Board of Directors will appoint Jens Montanana to the Synnex Board of Directors, subject to compliance with legal and regulatory requirements.
3. How is Westcon performing?: For its fiscal year end ended February 28, 2017, the Westcon Americas business generated approximately $2.2 billion of revenue and approximately $89 million in EBITDA, the companies said.
3. Is this a done deal?: No. It's subject to regulatory approval, though the companies don't expect to hit any hurdles. The deal is expected to close in Q3.
4. Was Westcon Damaged By An ERP Problem?: Back in April, a report suggested that Datatec and Westcon had stumbled with an SAP ERP deployment. However, Datatec insists the SAP deployment is now delivering value. In a statement today, both parties (Synnex and Westcon) said:
"Both entities expect to benefit from Westcon-Comstor’s recent completion of its global business transformation: an SAP implementation and business process outsourcing across five continents, intended to deliver consistent and improved customer services while generating significant efficiencies."
5. How Can I Learn More?: Synnex will discuss the deal at 9:00 a.m. (EST) on June 6, 2017. A webcast of the call will be available at http://ir.synnex.com. The conference call will also be available via telephone by dialing (800) 369-1162 in North America or (415) 228-5007 outside North America. The passcode for the call is "SNX." A replay of the webcast will be available at http://ir.synnex.com approximately two hours after the conference call has concluded where it will be archived for one year, the company said.
