Tech Data to acquire SDG companies for £220m


Technology distributor to buy six companies belonging to supplier arm of Specialist Computer Holdings in the UK, France and Netherlands  

Tech Data is to acquire distribution companies belonging to Specialist Distribution Group (SDG) in the UK, France and Netherlands for €277 million (£220 million).

The acquisitions are subject to approval of the EU regulatory authorities and are expected to be completed by the final quarter of the 2013 financial year.

SDG is the distribution arm of Specialist Computer Holdings (SCH), a privately-held distributor of enterprise-focused products, headquartered in the UK.

Tech Data would acquire SDG, IQ Sys and ISI Distribution in the UK, ETC and Best Ware in France; and ETC in the Netherlands. The purchases are expected to add more than 600 staff with knowledge in specific product, customer and operational disciplines.

For the financial year ending March 31, 2012, the companies to be acquired generated third party sales of €1.4 billion (£1.1 billion) across a portfolio of date centre, software and broadline products from industry suppliers.

The product mix comprised of around 40 per cent data centre products (including servers, storage and networking), around 20 per cent software (predominantly data centre-focused such as virtualisation and security) and around 40 per cent broadline products (including PCs and peripherals).

The agreement calls for a supplier agreement, whereby the seller, through its IT reseller business, will have annual purchase commitments through Tech Data for five years, which the company estimates will add incremental annual sales of €400 million (£317 million).

The firm said the acquisitions strengthens its enterprise business, Azlan, as well as its enterprise offerings in Europe, expanding its vendor and customer portfolios, and leveraging its pan-European infrastructure.

Tech Data CEO Robert M. Dutkowsky said: “This transaction adds breadth and depth to our product and customer portfolios, and creates a comprehensive enterprise solution stack in networks and communications, server and storage and enterprise software across a broader pan-European footprint.

“Our solid balance sheet and strong infrastructure enable Tech Data to make strategic investments such as this that broaden our services and solutions for customers, strengthen our relationship with key vendors and improve overall profitability and returns for our shareholders.”

SCH chairman Sir Peter Rigby said: “We have seen the consolidation of distribution businesses worldwide in the course of the last few years and consider that now is the optimum time to pass SDG into the hands of a global player.

“We believe that Tech Data will fulfil the aspirations of our distribution business and of our personnel, and are pleased to have selected Tech Data as the acquirer. This decision now allows us to focus entirely upon SCC to take its excellent track record to date yet further in terms of scale, capability and coverage.”