Tech Data to Buy Avnet's Technology Solutions Unit

Tech Data Corp. will buy Avnet Inc.'s technology solutions unit for about $2.6 billion, helping establish its foothold in Asia.

The deal includes $2.4 billion in cash and about $194 million in Tech Data stock.

Avnet said it expects to recognize a gain of $3.75 to $4.75 per share from the deal. Avnet shares rose 12% in premarket trading.

Tech Data Chief Executive Bob Dutkowsky said the deal helps establish the company's presence in Asia and "creates a premier global IT distributor."

Technology solutions—one of Avnet's two operating groups—is a distributor of data center and information technology hardware, software and supplies to various types of customers including resellers, software vendors and original equipment manufacturers. Its services help customers with infrastructure and application management, cloud computing, automation, data center transformation, security and big data.

Tech Data is a distributor of technology products, including technology hardware, networking equipment, software, consumer electronics, digital displays and mobile phones.

Avnet's remaining unit sells semiconductors, interconnect, passive and electromechanical devices and embedded products to electronic component manufacturers.

Tech Data said the deal is expected to add significantly to its adjusted earnings per share in the first year after closing and expects to achieve annual cost savings of about $100 million within two years, primarily from efficiencies related to technology platforms and by reducing duplicative functions and corporate expenses.

The deal is expected to close in the first or second quarter of 2017.

Write to Austen Hufford at [e-mail]

(END) Dow Jones Newswires

September 19, 2016 09:25 ET (13:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.