Tech Data has closed its purchase of Avnet Technology Solutions, creating a distribution powerhouse that further blurs the line between broadline and specialist distribution.
Announced last September, the deal is a $2.6 billion (U.S.) pact that will instantly ramp up Tech Data’s game in the enterprise, data centre, and cloud markets, and will greatly increase the distributor’s footprint — in terms of market presence, in terms of vendor lineup, and in terms of solution provider relationships.
“We’re all pretty excited. There’s a new $35 billion company in the business, and we’re all part of it,” said Rick Reid, president of Tech Data Canada of the pact.
While the papers are signed, and the funds and stock exchanged, there are still a lot of questions to be answered about the integration and what the combined company will look like.
So what changes now?
The most obvious current change is that the distributor formerly known as Avnet Technology Solutions has had an Avnetectomy, and is now branded online and in statements from executives as simply “Technology Solutions.”
The high level global structure for the combined entity has also been announced. There’s no surprise that Tech Data CEO Bob Dutkowsky remains atop the company, with his executive vice president team remaining intact, with Rich Hume serving as COO, Chuck Dannewitz as CFO, Beth Simonetti as chief human resources officer, John Tonnison at CIO, and David Vetter as chief legal officer.
Below them, reporting to COO Hume, will be a mix of legacy Tech Data and ATS executives, with Joe Quaglia remaining president of the Americas business, while legacy Tech Data European executives Els Demeester and Michael Urban will take roles as corporate vice president of integration, and strategy, transformation, and global vendor management, respectively. Former ATS global chief Patrick Zammit will take the reins of Tech Data’s European business as president, while former ATS executive Jaideep Malhotra will be the company’s president for global computing components, and William Chu will be president for Tech Data’s new Asia-Pacific business, a new market for the distributor acquired through the Avnet purchase. Getting into Asia “was one of the major attractions” of acquiring Avnet, Reid noted.
Beyond those publicly-announced changes, things remain pretty much the same for the time being.
“Our message to our troops, with folks on both sides, is that it’s business as usual today, tomorrow, and next week,” said Greg Myers, senior vice president of sales and marketing for Tech Data Canada.
Granted, it will be business as usual for two separate businesses, but they will be “operating very independently, but collaborating and sharing going forward,” Reid added.
What happens next?
For now, the exact structure of the combined entity post-integration remains undecided, or at least unannounced. While the message from Myers is for everyone to “stay in your lane” at the moment, he added that “over the next 90 to 180 days, you can expect to see the various features of the integration at work,” in terms of a joint go-to-market and a joint model of supporting customers. Beyond that 180-day window, the distributor will work on integrating technologies, processes, and other systems.
That’s not to say that work isn’t ongoing now. Reid noted that he and his Technology Solutions counterpart Brian Aebig have been “doing that legwork that could be legally done to get ready” and will now be “really getting into it” that the deal has closed. The integration in Canada will be made easier by proximity, Reid added. Literally, the two distributors’ Canadian headquarters are across the road from each other in Mississauga, and Reid notes the two are very similar in terms of culture and structure as well.
In Canada, the leadership of the combined entity will also have to be decided. That question mark is made all the larger by the recent announcement that Reid will be retiring in the near future now that the deal for Avnet Technology Solutions is done.
“There are lots of great executives on both sides, and one of them is about to retire, so there’s lots of room for good people here,” Reid said.
Prior to the announcement, Myers has been seen as the heir apparent for Reid, who has publicly mused about his retirement date since sales chief Frank Haid retired. Myers adding sales to his bailiwick in marketing at that time seemed to suggest that Myers would move up when Reid decided to call it a day.
That is the most likely scenario still, barring major surprises in the near future. An educated guess would be that Myers moves up to lead the overall entity, with Aebig taking a role leading whatever form the enterprise business unit ends up taking.