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Why did Inflow walk away from Tech Data?

Why did Inflow walk away from Tech Data?

Rival bid reverses decision made 55 days prior

Byju Pillai (Inflow Technologies)

Byju Pillai (Inflow Technologies)

Credit: Inflow Technologies

An “unsolicited investment offer” has been cited as the main reason behind Inflow Technologies’ decision to withdraw from closing its acquisition by Tech Data, IDG India has revealed.

Reversing a decision made 55 days prior, the specialist distributor has pulled out of an agreement which was first announced to the market in mid-December.

Speaking exclusively with Yogesh Gupta, executive editor of IDG India, Byju Pillai - president and CEO of Inflow - offered the following explanation; “Inflow got an unsolicited investment offer; their board and shareholders considered the same positively, hence they exercised their right to withdraw from the acquisition agreement with Tech Data."

At this stage, there has been no further clarification from Pillai or Inflow regarding the extent of the new offer and whether the distributor will either accept an acquisition bid from a rival party, or continue operating as before in the Asian market.

Global titans such as Ingram Micro and Synnex Corporation - a minority shareholder of Westcon-Comstor in Asia Pacific - are candidates capable of making an offer, in addition to smaller players motivated by regional expansion, such as Arrow Electronics - acquirers of Australian-based distributors Distribution Central and Observatory Crest - and Exclusive Networks, who previously snapped up Australian-based WhiteGold Solutions.

On the flip side, can local distributors such as Redington, HCL Infosystems, Savex Computers and Compuage India, or RP tech India, Iris Computers and Supertron Electronics be discounted?

The acquisition by Tech Data - revealed by Channel Asia in December - was expected to close during the company's first quarter of fiscal year 2021, subject to customary regulatory approvals. Following the withdrawal, Inflow has paid a break fee to the US-based distribution giant, as outlined in the original acquisition agreement.

Headquartered in Bangalore, India, Inflow goes to market as a value-added distributor with expertise in cyber security, networking, unified communications and collaboration, in addition to storage and server management, infrastructure and application software.

Previously backed by Datatec - owner of Westcon Group - before buying back equity in August 2013, Inflow has presence across India and South Asia, representing more than 40 vendors, including Cisco, Dell Technologies, Hewlett Packard Enterprise and Palo Alto Networks, alongside Oracle, Juniper Networks, Kaspersky and Micro Focus among others.


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