Enjoying The Fruits Of The Merger

TD Synnex in January unveiled its first full-year financial picture since it was created by the September 2021 close of the merger of IT distributors Tech Data and Synnex. The company’s top-line revenue growth was 14 percent compared with the combined revenue of the two separate companies the year before.

The merger did more than accelerate revenue. TD Synnex CEO Rich Hume, in an exclusive meeting at this month’s GTDC Summit, told CRN that a full year after the close of the merger, the company and its solution provider customers have enjoyed a wide range of benefits neither Tech Data nor Synnex could have provided on their own.

The biggest is a strengthened balance sheet that allows TD Synnex to invest in ways its predecessors could not, Hume said.

[Related: Ingram Micro, TD Synnex, D&H CEOs On The 2023 Economic Outlook]

“We have a bigger stream of investment dollars when you put the two together such that we can invest more in capabilities,” he said. “And then we have a very strong balance sheet as it relates to our opportunity to extend credit to the partner ecosystem. And we’ve been using those capabilities to make sure that we’re meeting or surpassing the market needs.”

And those new capabilities are not coming because TD Synnex took the merger as a chance to cut spending, Hume said. “In that instance, one plus one equals two, and we’re probably adding on top of that,” he said.

Hume also talked about the macroeconomic environment facing the IT industry and how issues caused by potential inflation and recession are opportunities for a company like TD Synnex to improve its capabilities.

“As economic cycles impact some of those areas and perhaps not others, we have the opportunity to make sure we’re transitioning our sales engagement or energy to where there is demand. … The market in total has a set of technologies that have better growth attributes: cloud, analytics, IoT, cybersecurity, hyperscale infrastructure. We’re really making sure that we’re doubling down on those areas that will have greater than the average growth of IT,” he said.

There’s a lot going on at TD Synnex and in IT distribution in general. Following is more of Hume’s take on what’s happening.

One quick note: When Hume uses the term “customers,” he is referring to channel partners, which are TD Synnex’s customers. That use of the word “customer” is pretty consistent through the IT distribution business.