It was announced by Tech Data Corp (NASDAQ:TECD) on Monday that they intend on investing approximately $2.6 billion to buy Avnet, Inc. (NYSE:AVT). The aim of this acquisition is to expand business throughout Asia and develop new products based on the foundation of cloud and data centers.
As per the agreement between Tech Data and Avnet, Tech Data will be liable to pay $2.4 billion in cash, as well as 2.785 million shares, which in total average approximately $200 million. This accounts for 7 percent of the total shares of Avnet.
The Executives Announcement Of This Acquisition As Well As The Plans For Tech Data
Bob Dutkowsky; the CEO of Tech Data, stated that this acquisition was a critical step into ensuring that Tech Data was able to not only stay relevant, but also to further develop the enterprise through focusing on a variety of elements including Internet Of Things, Intelligent Cars, Cloud-Delivery, and Mobile services.
It was revealed by Keith Housum; an analyst based in Cleveland, that through this acquisition Tech Data will become one of four top enterprises globally, who are responsible for providing security and data center solutions.
Furthermore, it was disclosed that through this deal, Tech Data hopes to balance out the revenue from its marketing platforms. Dutkowsky reported that currently the revenue is divided into two segments, 60 percent of revenue origination from Europe and 40 percent of the revenue being gathered from the Americans.
Once the deal is finalized, Avnet will receive between $3.75 to $4.75 per share. The date of the closure of this deal is subject to statutory approvals. However, it is expected to be finalized in the first half of this year
Stock Reports For These Two Merging Enterprises
Tech Data set a record high stock price of $85.50, this is the highest gain throughout the period of a single day recorded since March 1999. In addition to this, Avnet also rapidly increased its growth per share by almost 9% coming in at $42.82 per share.