Tech Data has entered into an agreement to acquire Innovix Distribution in a blockbuster move designed to expand presence across Asia Pacific.
Subject to customary closing conditions, Channel Asia can reveal that the transaction is expected to close during the third quarter of Tech Data’s fiscal year 2021.
The main motivation behind the acquisition is to “accelerate” Tech Data’s growth in next-generation technologies, with a specific focus on cloud, security and endpoint offerings. This is in addition to expanding business in the key geographies of Singapore, Malaysia and Hong Kong.
“Innovix is a leading regional IT distributor with an expansive range of IT products, solutions and services that will enhance our vendor portfolio, increase our customer base and strengthen our end-to-end solutions capabilities,” said Jaideep Malhotra, president of Asia Pacific at Tech Data.
Headquartered in Hong Kong, Innovix goes to market as a leading technology distributor across Asia, forming part of Fortune Global 500-listed Jardine Matheson Group, which spun-off Jardine OneSolution Holdings (JOS) and its subsidiaries in a multimillion-dollar acquisition by Hong Kong Broadband Network (HKBN) in December 2019.
Leveraging more than 60 years market experience, the distributor specialises in the delivery of cyber security, networking and digital infrastructure technologies, alongside hybrid IT, end-user computing and software solutions.
Key vendors across the region include Dell Technologies, Cisco, Hewlett Packard Enterprise, HP and Microsoft, as well as Lenovo, Sophos, Trend Micro, Veeam and Vertiv among others. Terms of the deal will also see Tech Data gain access to an ecosystem housing more than 8000 channel partners.
“Innovix’s strong team of 500+ experienced professionals have in-depth local industry knowledge that will augment our expertise in the market and strengthen our ability to deliver higher value to our channel partners across the region,” Malhotra added. “This investment demonstrates our commitment to the Asia Pacific region and is an important, early milestone in our transformational journey since being acquired by Apollo Global Management.
“The addition of Innovix reinforces our collective focus on growth and diversification, supporting Tech Data’s announced plans to transform our company into one that defines a new standard of operational and cultural excellence in our industry.”
According to Eric van der Hoeven - CEO of Innovix - the business is “proud” to have built a 60-plus-year reputation as a leading IT distributor across Asia Pacific.
“Our focus on helping businesses accelerate growth and capitalise on digital transformation is perfectly aligned with Tech Data’s mission to connect the world with the power of technology, and we look forward to working together to serve this market and stay ahead of evolving technologies and consumption models,” he said.
The move comes more than six months after India-based Inflow Technologies withdrew from closing its acquisition by Tech Data, breaking free from the agreement less than two months after striking a deal.
The acquisition - revealed by Channel Asia in December - was expected to close during the distributor’s first quarter of fiscal year 2021, subject to customary regulatory approvals. Following the withdrawal, Inflow paid a break fee to Tech Data, as outlined in the original acquisition agreement.
“We respect Inflow’s decision to go in a different direction,” said Malhotra, speaking at the time of the announcement in February. “Tech Data is committed to our strategy of delivering higher value by strengthening our end-to-end portfolio and optimising our global footprint, and we continue explore opportunities to grow our business in alignment with this strategy.”
Meanwhile, and now that its $5.4 billion acquisition by affiliates of private equity firm Apollo Global Management has reached completion, Tech Data recently unveiled plans to invest around $750 million in digital transformation initiatives over the next five years.
The global distribution giant said that the investment will underpin its strategy to accelerate innovation in ways that it hopes will deliver improved experiences and greater agility for businesses across the technology ecosystem.
Specifically, the company’s digital transformation initiatives are focused on delivering state-of-the-art automation, platforms and analytics aimed at allowing it to be more agile and responsive to the rapidly evolving needs of its channel partners.
The transformation program also includes building a hyper-scalable digital business platform and a cloud-based digital marketplace that are designed to support Tech Data’s “ambitious” growth plans and serve emerging technology markets and consumption models.