| Item 1.01 | Entry into a Material Definitive Agreement. |
Senior Notes Offering
On August 9, 2021, SYNNEX Corporation (“SYNNEX” or the “Company”) announced that it had completed its previously reported offering and issuance of (i) $700,000,000 aggregate principal amount of 1.250% Senior Notes due 2024 (the “2024 Notes”), (ii) $700,000,000 aggregate principal amount of 1.750% Senior Notes due 2026 (the “2026 Notes”), (iii) $600,000,000 aggregate principal amount of 2.375% Senior Notes due 2028(the “2028 Notes”), and (iv) $500,000,000 aggregate principal amount of 2.650% Senior Notes due 2031 (the “2031 Notes” and, together with the 2024 Notes, 2026 Notes and 2028 Notes, the “Notes,” and such offering, the “Notes Offering”). The Notes were sold in a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and to certain persons outside of the United States pursuant to Regulation S under the Securities Act.
The Notes were issued pursuant to, and are governed by, an indenture, dated as of August 9, 2021 (the “Base Indenture”), between SYNNEX and Citibank, N.A., as trustee (the “Trustee”), as supplemented by a first supplemental indenture dated as of August 9, 2021 between SYNNEX and the Trustee relating to the 2024 Notes, a second supplemental indenture dated as of August 9, 2021 between SYNNEX and the Trustee relating to the 2026 Notes, a third supplemental indenture dated as of August 9, 2021 between SYNNEX and the Trustee relating to the 2028 Notes and a fourth supplemental indenture dated as of August 9, 2021 between SYNNEX and the Trustee relating to the 2031 Notes (such supplemental indentures, together with the Base Indenture, the “Indenture”), between SYNNEX and the Trustee. The Indenture contains customary covenants and restrictions, including covenants that limit SYNNEX’ and certain of its subsidiaries’ ability to create or incur liens on shares of stock of certain subsidiaries or on principal properties, engage in sale/leaseback transactions or, with respect to SYNNEX, consolidate or merge with, or sell or lease substantially all its assets to, another person. The Indenture also provides for customary events of default.
The Notes Offering is part of the financing for the previously announced proposed acquisition of Tiger Parent (AP) Corporation, a Delaware corporation (“Tiger Parent”), the indirect parent entity of Tech Data Corporation, a Florida corporation (“Tech Data”), pursuant to that certain Agreement and Plan of Merger dated March 22, 2021 (the “Merger Agreement”), between SYNNEX, Spire Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of SYNNEX, Spire Sub II, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of SYNNEX and Tiger Parent (the “Merger”). The Notes Offering replaces $2.5 billion of bridge commitments provided under the previously announced debt commitment letter entered into by SYNNEX in connection with the Merger. SYNNEX intends to utilize its previously announced new $1.5 billion term loan facility, together with the net proceeds from the Notes Offering and cash on hand at SYNNEX and Tech Data, including the $500 million equity contribution to be made prior to the Merger by an affiliate of Apollo Global Management, Inc. that is the sole stockholder of Tiger Parent, to fund the aggregate cash portion of the consideration payable to Tiger Parent in connection with the Merger, refinance certain of SYNNEX’ and Tech Data’s existing indebtedness, and pay related fees and expenses. SYNNEX expects to use any remaining net proceeds from the Notes Offering for general corporate purposes. If (i) the closing of the Merger has not occurred on or prior to December 22, 2021 (provided that, if the termination date of the Merger Agreement is extended, this date will also be extended to the same extended termination date, but in no case will this date be extended beyond June 22, 2022), (ii) SYNNEX notifies the trustee under the indenture governing the Notes in writing that SYNNEX will not pursue the consummation of the Merger or (iii) the Merger Agreement has been terminated without the consummation of the Merger, SYNNEX will be required to redeem all of the outstanding Notes at a special mandatory redemption price equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest from, and including, the date of initial issuance (or the most recent interest payment date to which interest has been paid, whichever is later) to, but excluding, the special mandatory redemption date.
The Notes will accrue interest payable semi-annually in arrears on February 9 and August 9 of each year, beginning on February 9, 2022. The 2024 Notes will accrue interest at a rate of 1.250% per year, the 2026 Notes will accrue interest at a rate of 1.750% per year, the 2028 Notes will accrue interest at a rate of 2.375% per year and the 2031 Notes will accrue interest at a rate of 2.650% per year. The interest rate payable on each series of the Notes will be subject to adjustment from time to time if the credit rating assigned to such series of Notes is downgraded (or downgraded and subsequently upgraded), as described in the Indenture. The 2024 Notes will mature on August 9, 2024, the 2026 Notes will mature on August 9, 2026, the 2028 Notes will mature on August 9, 2028, and the 2031 Notes will mature on August 9, 2031.
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