Tech Data To Acquire U.K. Networking Distributor

Tech Data, based here, hopes to close the transaction by March 31, pending approval of Azlan shareholders, the distributor said.

Azlan reported an operating profit of $9.3 million, before exceptional items, on sales of about $450 million for the six-month period ended Sept. 31, 2002.

Azlan carries vendors such as Cisco Systems, Alcatel, Computer Associates International, Citrix Systems, Enterasys, Nortel Networks, RSA Security and 3Com. Its solution providers typically serve large enterprises in 15 European countries, including France, Germany, Spain and the United Kingdom, Tech Data said.

"Azlan represents an ideal strategic match for our European operations," said Steve Raymund, chairman and CEO of Tech Data, in a statement. "Our respective business models are highly complementary yet distinct in terms of product focus areas, customer bases, distribution capabilities and overall service offerings. Azlan is a leader in a value-added segment of the industry that would provide an exciting new dimension and breadth of service to our European business."

Azlan Chairman Barrie Morgans said Tech Data's financial resources and strategic direction make the acquisition attractive to Azlan.

"Becoming part of a global enterprise greatly appeals to Azlan, but this move signifies much more to our company as we look to expand our focused product offering and potentially further diversify our own operations," Morgans said in a statement.

The acquisition comes a day after Tech Data laid off 82 people, about 3 percent of its U.S. workforce.

Tech Data said Thursday sales in the fourth quarter, ended Jan. 31, would be at or above the high-end of its earlier guidance, which forecast sales in the range of $3.80 billion to $3.95 billion.

Tech Data could not update its fourth-quarter earnings outlook until completion of its year-end closing process. However, the distributor said earnings for fiscal 2004 could decline by up to 25 percent, excluding accretive earnings from the Azlan acquisition, because of uncertain demand for IT products and competitive margin pressure and the upgrade of its European systems infrastructure.

Shares of Tech Data closed at $24.24 Thursday, down 74 cents per share, or 3 percent.