Electronics distributor Avnet Inc. has completed the sale of its Technology Solutions business to Tech Data Corp. for approximately $2.4 billion in cash and shares of common stock valued at $245 million.
The Technology Solutions business distributes enterprise computing servers and systems, software, storage, and services from technology manufacturers and software developers to customers and suppliers in over 80 countries. It also provides hard-disk drives, microprocessors, motherboards, and DRAM module technologies to manufacturers of general-purpose computers and system builders
With the divestiture of these operations, Avnet said it will concentrate its efforts solely on electronic components and integrated and embedded solutions. The company will now operate globally under the name Avnet, dispensing with the business-unit moniker “Electronics Marketing.”
“We will now be able to focus all of our attention and considerable expertise and scale in supporting our customers at every phase of the product lifecycle with services that offer a time-to-market advantage," says Avnet CEO William Amelio. "We also have substantial financial resources to further drive our targeted investments in integrated and embedded solutions, IoT, and digital platforms to create even more opportunities for makers, entrepreneurs, and large manufacturers.”
The sale—announced in September 2016, shortly after Amelio's appointment as CEO—comes on the heels of a downturn in sales for the Technology Solutions operating group. For its 2016 fiscal year—which ended July 2—sales decreased 8.8% from 2015 and 11.9% from 2014.
Following the close of the transaction, Clearwater, Fla.-based Tech Data—a wholesale distributor of technology products and services—expands its operations from 21 to 35 countries and gains a presence in the Asia-Pacific region. Rich Hume has been named executive vice president and chief operating officer of the business unit, reporting to CEO Bob Dutkowsky.
For the time being, Tech Data and Technology Solutions will continue to operate as separate entities, with integration steps such as system and process changes to be phased in over time.
