Synnex seals $7.2bn Tech Data deal

BY Richard Summerfield

IT solutions firm Synnex Corp is to acquire Tech Data for $7.2bn, including debt. The deal will create a combined operation with revenues in the region of $57bn and a headcount of around 22,000 staff.

The terms of the deal will see Tech Data’s owner, Apollo Global Management, take ownership of 45 percent of the combined entity and use it as an opportunity to refinance the distributor’s existing net debt. The companies expect the deal to close in the second half of 2021.

Synnex shareholders will own about 55 percent of the combined company. Tech Data has indicated that it expected net optimisation and synergy benefits of $100m in the first year after closing, with a minimum of $200m by the end of the second year.

“We are excited to partner with a world-class industry leader like Tech Data and believe that this combination will benefit all our stakeholders,” said Dennis Polk, president and chief executive of Synnex. “This transaction allows for accelerated revenue and earnings growth, an expanded global footprint, and the ability to drive significant operating improvements while continuing to create shareholder value.”

"This is transformational for Tech Data, Synnex and the entire technology ecosystem,” said Rich Hume, chief executive of Tech Data. “Together, we will be able to offer our customers and vendors exceptional reach, efficiency, and expertise, redefining the experience and value they receive. The combined company will also benefit from significant financial strength to invest in its core growth platform as well as next generation cybersecurity, cloud, data, and IoT technologies, which are experiencing explosive growth due to work from home and return to office trends.”

Apollo, which wholly owns and manages Tech Data through its funds, will also enjoy certain merger benefits. As per the agreement, Apollo will receive an aggregate of 44 million shares of Synnex common stock plus the refinancing of existing Tech Data net debt and redeemable preferred shares of approximately $2.7bn.

News: Synnex Corp to merge with Tech Data in $7.2 billion deal

G4S shareholders agree to $5.3bn Allied deal

BY Richard Summerfield

Following a long-running battle for control of the company, G4S shareholders have finally accepted a $5.3bn bid from Allied Universal.

Allied Universal has received valid acceptances representing roughly 79 percent of the G4S share capital. The threshold was 50 percent plus one G4S share.

The deal will create the world’s largest private security company, generating more than $18bn in revenue and employing more than 750,000 security guards and other staff.

The final Allied Universal offer price of 245 pence per G4S share represents a premium of approximately 68 percent to the closing price of 146 pence per G4S share on 11 September 2020, the last business day before commencement of the offer period, and a premium of approximately 91 percent to the three-month volume weighted average closing price of 128 pence per G4S share on 11 September 2020.

Allied Universal beat Canadian rival GardaWorld to G4S, after the two companies had been involved in a bidding war. In December, G4S agreed to be acquired by Allied, rejecting GardaWorld’s offer of 235 pence per share in favour of Allied’s bid, which was 10 percent higher. GardaWorld had been attempting to acquire G4S since last summer, raising the price of its bid four times since first approaching shareholders about a potential takeover.

“We are pleased that a very large proportion of shareholders have accepted Allied Universal’s final offer,” said John Connolly, chairman of the G4S board. “The G4S board believes that the offer provides shareholders with an attractive premium, while securing the future success of G4S for employees, customers, pension scheme members and other stakeholders.”

“The combination of G4S and Allied Universal creates the global leader in security with revenues of over $18billion, industry leading talent and expertise and unmatched market coverage,” said Ashley Almanza, chief executive of G4S. “This unique combination will offer customers exceptional service and provides employees with an exciting future.”

He added: “My team and I look forward to working with Allied to support a successful integration of the two businesses.”

News: G4S saga ends as shareholders accept $5.3 billion Allied Universal offer

Wipro to acquire Capco in $1.5bn deal

BY Fraser Tennant

In a deal that will make it one of the largest providers of integrated, end-to-end consulting, digital, cloud and IT transformation services, Wipro Ltd is to acquire global management and technology consultancy Capco for $1.5bn in cash.

When combined, the capabilities of Indian multinational Wipro alongside Capco’s domain and consulting strength will deliver integrated, bespoke solutions to help fuel growth and achieve transformation objectives.

Recognised globally for its comprehensive portfolio of services, strong commitment to sustainability and good corporate citizenship, Wipro has over 190,000 employees serving clients across six continents.

The acquisition of Capco, which is Wipro’s biggest since the company acquired Infocrossing Inc. for $548m in 2007, is intended to give the tech services giant a strong consulting footprint, as well as help it to regain some of the momentum the company has lost to rivals in recent years.

“We are very excited to welcome Capco’s admirable leadership team and employees, and global clients, to Wipro,” said Thierry Delaporte, chief executive and managing director of Wipro. “Together, we can deliver high-end consulting and technology transformations, and operations offerings to our clients. Wipro and Capco share complimentary business models and core guiding values, and I am certain that our new Capco colleagues will be proud to call Wipro home.”

London-based Capco has an experienced executive team and over 5000 business and technology consultants based across more than 30 global locations, supporting clients through their expert insights, entrepreneurial approach and focus on delivery excellence.

“We are incredibly excited to join our new colleagues at Wipro,” said Lance Levy, chief executive of Capco. “Together, we will offer bespoke transformational end-to-end solutions, now powered by innovative technology at scale, to create a new leading partner to the financial services industry.”

The acquisition is subject to customary closing conditions and regulatory approvals and is expected to close in June 2021.

Mr Levy concluded: “We look forward to leveraging the complementary capabilities and similar cultures of both companies to drive industry change and offer exciting opportunities for both our clients, and our people.”

News: Wipro to buy UK-based consultancy Capco for $1.45 billion

Nestlé to divest water unit for $4.3bn

BY Richard Summerfield

Nestlé S.A. has agreed to sell its Nestlé Waters North America (NWNA) unit to One Rock Capital Partners and Metropoulos & Co. in a deal worth $4.3bn.

In June 2020, Nestlé announced it was conducting a strategic review of the unit, as it planned to sharpen the focus of its global water portfolio. A potential sale to One Rock had been rumoured for a number of weeks.

The sale includes a number of brands in the US and Canada, as well as the US direct-to-consumer and office beverage delivery service ReadyRefresh. Headquartered in Stamford, Connecticut, NWNA has approximately 7000 employees in the US and more than 230 in Canada. The unit also has 27 production facilities across North America.

“We continue to transform our global waters business to best position it for long-term profitable growth,” said Mark Schneider, chief executive of Nestlé. “This sale enables us to create a more focused business around our international premium brands, local natural mineral waters and high-quality healthy hydration products. We will also boost our innovation and business development efforts to capture emerging consumer trends, such as functional water.”

“Nestlé Waters North America’s iconic brands have earned the trust and preference of consumers everywhere due to an uncompromising commitment to quality,” said Tony W. Lee, managing partner of One Rock. “We are excited to further this commitment and build upon the market leadership of the business alongside the Company’s talented management team.”

“One Rock brings to bear extensive corporate carve out and operational capabilities that we believe will be instrumental to NWNA’s ongoing success as a standalone company,” said R. Scott Spielvogel, managing partner of One Rock. “We look forward to working closely with our Operating Partners to accelerate the growth of NWNA’s extraordinary set of attractive brands, while continuing to create value in the communities in which the Company operates.”

“I am pleased to have the opportunity to lead NWNA as it enters the next phase of evolution,” said Dean Metropoulos, founder of Metropoulos & Co. “This is an important inflection point for the business as it transitions to an independent company, and I look forward to collaborating with One Rock and NWNA’s management team to deliver unparalleled value to our customers.”

News: Nestle to sell N.American water brands for $4.3 billion, focus on premium lines

Ideal fit: Lanxess acquires Emerald Kalama in $1.1bn deal

BY Fraser Tennant

In a move designed to boost its presence in North America, Germany-based specialty chemicals company Lanxess has accelerated its growth course to acquire Emerald Kalama Chemical for an enterprise value of $1.1bn.

Lanxess has stated that it will deploy existing liquidity to purchase Emerald, which is majority-owned by affiliates of US private equity firm American Securities LLC. Like its acquirer, Emerald is a specialty chemicals company whose products include food preservatives, household and cosmetic applications, flavours and fragrances, as well as plastics and adhesives for industry.

The Cologne-headquartered company was one of a number of potential suitors for US-based Emerald, which reportedly included private equity firms HIG Capital, Rhone Capital and TPG Capital.

“We are gaining further momentum on our growth course,” said Matthias Zachert, chairman of Lanxess. “The businesses of Emerald Kalama Chemical are an ideal fit for us. We will further strengthen our consumer protection segment and open up new application areas with strong margins, for example in the food industry and animal health sector. In addition, we will also enlarge our presence in our growth region of North America. All this will make us even more profitable and stable.”

Employing 500 people, Emerald runs three production sites in Kalama in the US state of Washington, Rotterdam in the Netherlands and Widnes in the UK. The company reported 2020 sales of approximately $425m, and approximately $90m in earnings before interest, taxes, depreciation and amortisation (EBTDA).

Around 45 percent of its turnover is generated in North America.

“The company has a very efficient setup, bundling all its production activities at only three sites,” added Mr Zachert. “That is why we expect to integrate the new business very quickly.”

With the acquisition of Emerald, Lanxess is pursuing a targeted expansion of its portfolio. The company has a strong position in the global business with antimicrobial active ingredients and preservatives, including for consumer protection products and animal hygiene, such as disinfectants effective against coronavirus (COVID-19).

The deal is expected to close in the second half of 2021 subject to approval by the relevant authorities.

News: Chemical firm Lanxess buys U.S.-based Emerald Kalama in $1.1 billion deal