Synnex Agrees To Buy Gates/Arrow

Synnex Information Technologies Gates/Arrow Distributing Arrow Electronics

The purchase price, a combination of cash and assumption of stated liabilities, will be determined by the value of the assets and liabilities on the closing date, which is expected within 30 days to 45 days, the companies said.

"The Gates/Arrow acquisition is strategic in that it offers Synnex further expansion and greater market share in North America very effectively," said Bob Huang, president and CEO of Fremont-based Synnex, in a statement. "Synnex and Gates/Arrow are synergistic in product offerings, customer focus and business practices, and the acquisition renders a natural fit for the two entities. Both Gates/Arrow and Synnex distribution headquarters are located in Greenville, S.C., as well. We expect the integration of the two organizations to be a seamless transition, and we look forward to the Gates/Arrow staff becoming a part of the Synnex distribution team."

Gates/Arrow accounted for about 5 percent of Arrow's sales in the March quarter, or about $97 million. Privately held Synnex recorded about $3.2 billion in revenue last year.

"Over the past several years, our strategy has been to focus increasingly on our midrange computer products businesses, where our value-add is greater, and to reduce the relative importance of the lower-gross-margin Gates/Arrow business," said Francis Scricco, president and CEO of Melville, N.Y.-based Arrow. "This transaction provides the most attractive avenue for Arrow to exit the Gates/Arrow business while best fulfilling our obligations to our customers, suppliers and employees."

Arrow expects to incur a charge of approximately $15 million in connection with the sale of Gates/Arrow.