SYNNEX Corporation Successfully Enters into $5.0 Billion Credit Facility

Rhea-AI Summary

On April 19, 2021, SYNNEX Corporation (NYSE: SNX) announced the establishment of a $5.0 billion credit facility, which includes a $1.5 billion term loan and a $3.5 billion revolving credit facility. This facility will replace part of the $7.5 billion bridge commitments related to its proposed merger with Tech Data. The deal is expected to close in the second half of 2021, subject to regulatory approvals and stockholder consent. SYNNEX plans to use the loan to refinance debt from both companies and maintain a strong cash flow and investment-grade credit profile.

Positive

• Secured a $5.0 billion credit facility, enhancing financial flexibility.
• Term loan portion utilized for refinancing existing debts at SYNNEX and Tech Data.
• Maintains an expected investment-grade credit profile post-merger.

Negative

• None.

FREMONT, Calif., April 19, 2021 /PRNewswire/ -- SYNNEX Corporation (NYSE: SNX), a leading provider of distribution, systems design and integration services for the technology industry, announced today that it has entered into a new $5.0 billion credit facility consisting of a $1.5 billion term loan and a $3.5 billion revolving credit facility with 29 leading financial institutions.  This new credit facility replaces $5.0 billion out of the $7.5 billion of bridge commitments provided under the previously disclosed debt commitment letter entered into by SYNNEX in connection with its proposed merger with Tech Data.  The remaining $2.5 billion of bridge commitments were also successfully syndicated to a number of financial institutions. The closing and initial funding under these facilities is subject to customary funding conditions, including the consummation of the previously announced merger with Tech Data.  As previously disclosed, SYNNEX intends to utilize the $1.5 billion term loan facility to refinance certain debt at SYNNEX and Tech Data upon closing of the proposed merger.  The $3.5 billion revolving credit facility, which is expected to be undrawn at the close of the merger, will be used as needed for general corporate purposes, including the working capital needs of the business.  The merger transaction is expected to close in the second half of calendar year 2021, subject to the satisfaction of customary closing conditions, including the approval by SYNNEX stockholders and regulatory approvals. 

"Obtaining broad support from our banking group is an important step in establishing the capital structure necessary for our planned merger with Tech Data," said Marshall Witt, CFO of SYNNEX.  "This credit facility, combined with our anticipated strong cash position projected at close and healthy expected pro forma cash flow generation of the combined companies, provide us with ample ability to refinance debt at both companies with the proceeds of the new credit facility and maintain an expected investment-grade credit profile, while continuing to make investments in our business."

Citigroup Global Markets Inc. and its affiliates acted as sole lead arranger and bookrunner for the bridge loan facility and joint lead arranger and joint bookrunner for the new revolving credit and term loan facilities along with Bank of America, N.A., The Bank of Nova Scotia, Wells Fargo Bank, National Association, HSBC Bank USA, N.A., and MUFG Bank, Ltd, and Sumitomo Mitsui Banking Corporation acted as a joint lead arranger and joint lead bookrunner on the term loan facility.

This press release shall not constitute an offer to sell or a solicitation of an offer to purchase any loans or securities. 

About SYNNEX
SYNNEX Corporation (NYSE: SNX) is a Fortune 200 corporation and a leading provider of a comprehensive range of distribution, systems design, and integration services for the technology industry to a wide range of enterprises.  Founded in 1980, SYNNEX Corporation operates in numerous countries throughout North and South America, Asia-Pacific, and Europe. Additional information about SYNNEX may be found online at synnex.com.

Safe Harbor Statement
Statements in this news release that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, such as the conditions of the new facility, the anticipated use of the funds from the new credit facility, anticipated cash and cash flow positions at the time of the closing of the merger, and the timing of the closing of the merger, involve known and unknown risks and uncertainties which may cause the Company's actual results in future periods to be materially different from any future performance that may be suggested in this release.  The Company does not intend to update any forward-looking statements contained in this release, unless otherwise required by law.

Copyright 2021 SYNNEX Corporation. All rights reserved. SYNNEX, the SYNNEX Logo, and all other SYNNEX company, product and services names and slogans are trademarks or registered trademarks of SYNNEX Corporation. SYNNEX and the SYNNEX Logo Reg. U.S. Pat. & Tm. Off.  Other names and marks are the property of their respective owners.

Investor Contact:
Liz Morali
Investor Relations
SYNNEX Corporation
IR@synnex.com
(510) 668-8436

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SOURCE SYNNEX Corporation

FAQ

What is the significance of SYNNEX Corporation's new $5.0 billion credit facility?

The credit facility provides financial flexibility for SYNNEX in connection with its merger with Tech Data, allowing for debt refinancing and support for general corporate purposes.

How will SYNNEX use the $1.5 billion term loan from the new credit facility?

SYNNEX intends to use the $1.5 billion term loan to refinance existing debt at both SYNNEX and Tech Data after the merger closes.

When is the merger between SYNNEX Corporation and Tech Data expected to close?

The merger is anticipated to close in the second half of 2021, pending regulatory approvals and stockholder consent.

What are the components of SYNNEX Corporation's new credit facility?

The new credit facility comprises a $1.5 billion term loan and a $3.5 billion revolving credit facility.

What institutions participated in SYNNEX Corporation's credit facility arrangement?

The credit facility was arranged by Citigroup Global Markets Inc., Bank of America, Wells Fargo Bank, and several other leading financial institutions.