Introductory Note
Closing of the Tech Data Acquisition
On September 1, 2021, SYNNEX Corporation (“SYNNEX”) completed its acquisition of Tiger Parent (AP) Corporation, a Delaware corporation (“Tiger Parent”), which is the parent corporation of Tech Data Corporation, a Florida corporation (“Tech Data”). The acquisition was completed pursuant to the terms and conditions of the Agreement and Plan of Merger (the “Merger Agreement”), dated March 22, 2021 by and among SYNNEX, Spire Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of SYNNEX (“Merger Sub I”), Spire Sub II, LLC, a Delaware limited liability company and a wholly owned subsidiary of SYNNEX (“Merger Sub II”), and Tiger Parent, pursuant to which, subject to the terms and conditions of the Merger Agreement, Merger Sub I merged with and into Tiger Parent (the “Initial Merger”), with Tiger Parent surviving the Initial Merger as a wholly owned subsidiary of SYNNEX (such surviving corporation, the “Surviving Corporation”), followed immediately by the merger of the Surviving Corporation with and into Merger Sub II (the “Subsequent Merger” and together with the Initial Merger, the “Mergers”), with Merger Sub II surviving the Subsequent Merger as a wholly owned subsidiary of SYNNEX.
Pursuant to the Merger Agreement, and upon the terms and subject to the conditions described therein, at the effective time of the Initial Merger (the “Effective Time”), except as otherwise set forth in the Merger Agreement, all the issued and outstanding common shares, $0.01 par value, of Tiger Parent converted automatically into and thereafter represented only the right to receive (i) $1,610,000,000 in cash, in the aggregate (the “Aggregate Cash Consideration”) and (ii) 44,000,000 total shares of common stock, par value $0.001, of SYNNEX (“SYNNEX Stock”), plus cash in lieu of any fractional shares of SYNNEX Stock (the “Aggregate Stock Consideration”), in each case, without interest ((i) and (ii) together, the “Merger Consideration”). The Aggregate Stock Consideration was issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, to an “accredited investor” as defined in Rule 506 of Regulation D promulgated by the U.S. Securities and Exchange Commission, without the use of any general solicitation or advertising to market or otherwise offer the securities for sale. Immediately after the Mergers, there were approximately 95,985,045 shares of SYNNEX Stock outstanding, with SYNNEX’ stockholders prior to the Initial Merger holding approximately 54% of such outstanding shares, and Tiger Parent’s stockholders prior to the Initial Merger holding approximately 46% of such shares.
The foregoing description of the Merger Agreement is qualified in its entirety by reference to the full text of the Merger Agreement, which was filed as Exhibit 2.1 to the Current Report on Form 8-K filed by SYNNEX on March 22, 2021 and is incorporated herein by reference.
Sources and Uses and Bond Redemptions
In connection with the closing of the Mergers, SYNNEX used the net proceeds from its previously disclosed offering and sale of $2.5 billion aggregate principal amount of senior notes, together with borrowings made under its previously announced new $1.5 billion senior unsecured term loan facility and new $3.5 billion senior unsecured revolving credit facility, and cash on hand at SYNNEX and Tiger Parent, and their respective subsidiaries, including a $500 million equity contribution in the aggregate made to Tiger Parent by certain of its affiliates prior to the Mergers, to pay the Aggregate Cash Consideration, refinance certain of SYNNEX’ existing indebtedness (as described further below) and indebtedness under Tech Data’s Asset-Based Credit Agreement (which was repaid in full and terminated in connection therewith), and pay related fees and expenses in connection with the foregoing.
SYNNEX also announced that its wholly-owned subsidiary, Tech Data, has notified the trustee (“Trustee”) for Tech Data’s 3.700% Senior Notes due 2022 (CUSIP No. 878237 AG1) (the “2022 Notes”) and Tech Data’s 4.950% Senior Notes due 2027 (CUSIP No. 878237 AH9) (the “2027 Notes” and together with the 2022 Notes, the “Tech Data Notes”) that it intends to redeem, in full, the approximately $66 million outstanding aggregate principal amount of 2022 Notes and the approximately $131 million outstanding aggregate principal amount of 2027 Notes on October 1, 2021 (the “Redemption Date”).
The redemption will be effected in accordance with the terms of the indenture (as supplemented by the respective officer’s certificates and supplemental indentures) governing the Tech Data Notes. The redemption price for the respective Tech Data Notes will be equal to the sum of the present values of the remaining scheduled payments of principal and interest on the respective Tech Data Notes to be redeemed from the Redemption Date to January 15, 2022 (in the case of the 2022 Notes) or to November 15, 2026 (in the case of the 2027 Notes),
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