Scribona and Tech Data sign Asset Purchase Agreement
Leading Nordic IT distributor Scribona AB (publ.) today announced that it has signed an Asset Purchase Agreement (‘Agreement’) with the Nordic affiliates of Tech Data Corporation (NASDAQ: TECD “Tech Data”), one of the leading global distributors of IT products. The Agreement will result in the transfer of essentially all of Scribona’s operating activities. The Scribona Board of Directors is unanimously recommending that Scribona’s shareholders approve the Agreement.
Tech Data will pay net asset value, as agreed between the parties, plus a Premium for Scribona’s operational assets. The assets to be transferred will include inventory, some intellectual property, material contracts, customer list, office equipment, and other assets required for the operation of the business. The Premium will be in the range of €13.5 million to €16.5 million, depending upon certain performance criteria.
The net proceeds realised by the company will include the value of the transferred assets, the Premium, less all shut-down costs and any differences in asset valuation. Preliminary calculations suggest that net proceeds per share will be in the range of 4.4 to 5.1 SEK per share, which represents a premium of 9 to 24% as compared to the average closing share price on the OMX Nordic Exchange Stockholm during the 30 trading days prior to the company’s 29 February press release. More information on the calculation of net proceeds and the distribution of the proceeds will be provided in the documentation for the AGM on 29 April 2008.
The transaction is subject to the approval of the Annual General Meeting of Scribona Shareholders on 29 April 2008, the EU Competition Authority and meeting certain performance-related criteria.
SUMMARY
* Scribona’s Board of Directors unanimously recommends shareholder approval of the Agreement
* MarCap Investors LP and Nove Capital, which together represent approximately 25% of Scribona’s share capital and voting rights, have indicated their support for the Agreement and have committed to vote in favor of the transaction.
* The Board of Directors of Scribona has permitted Tech Data to perform due diligence on its business prior to the announcement of the APA.
* The transaction is also subject to a set of performance criteria including the transfer of a required number of employees, operating performance during the closing period, as well as successful negotiations with vendors and trade unions.
* Preliminary calculations suggest that net proceeds per share will be in the range of 4.4 to 5.1 SEK per share which represents a premium of 9 to 24% as compared to the average closing share price on the OMX Nordic Exchange Stockholm during the 30 trading days prior to the company’s 29 February press release.
* Further details on the transaction will be presented in connection with the notice to the 2008 Scribona Annual General Meeting of Shareholders on 29 April 2008.
Fredrik Berglund, President and CEO of Scribona commented: “We announced back in December that we were in discussions with a number of unnamed parties who had indicated an interest in the company. We have been focusing on the operational reorganization of the company in order to enhance our position in increasingly competitive markets. The combination of the Scribona and Tech Data businesses will create a strong IT industry player with the market reach to develop further. The industrial logic of the combination is compelling and provides the basis for the future development of the Scribona business and marks a new phase in our development. The new entity will be a leading distributor of IT products in the Nordic region and will be able to improve customer satisfaction through increased market focus and deliver sustainable long term growth in an increasingly competitive market environment.”
“The Board of Directors unanimously supports the agreement and will recommend to the Annual General Meeting of Shareholders to accept it. I am confident that all our employees will continue to focus their energies on satisfying our customers and delivering against targets in the upcoming transitional period and we will be working very closely with the unions to ensure an appropriate outcome for all employees concerned.”
“Through this transaction, Tech Data will gain a talented team of highly experienced distribution employees that will help strengthen our operations and drive stronger relationships with our key vendor partners and customers,” said Robert M. Dutkowsky, Chief Executive Officer of Tech Data Corporation. “This combination will provide Tech Data’s new and existing customers access to an extended portfolio of vendor partners including an expanded suite of value-added hardware and software business solutions.”
Variation in Asset Purchase Price and Premium
The Asset Purchase Price consists of the agreed net asset value plus the Premium. Net asset value will be calculated for the assets transferred at closing in accordance with valuation rules agreed between the parties. Key assets to be transferred include the inventory, some intellectual property, material contracts, office equipment, and other assets required for the operation of the business. The net asset value will vary depending on the age and condition of assets transferred at closing.
The Premium will be in the range € 13.5 million - € 16.5 million and is subject to a set of operational and performance criteria.
Staffing
As of 4 March 2008, Scribona will begin consultations with the trade unions regarding the implications of this Agreement for the employees, including redundancies.
Background
The global IT industry is currently going through a process of consolidation, with increased competition, diversification of sales channels and price pressure, as well as the high level of recent mergers and acquisitions activity in the sector. Scribona received several approaches from third parties during the 2007, with a view to initiate merger or takeover talks. These approaches did not lead to any formal proposals, but did cause the Board of Directors to initiate a formal process for evaluating approaches received from third parties. The Board of Directors also started proactively considering the strategic options available for Scribona in the context of increased competition and a consolidating industry. During the late second half of 2007, Tech Data expressed interest in Scribona and the Board of Directors subsequently allowed Tech Data to perform a due diligence process.
As a result of the transaction, the consolidated company will have the resources to create dedicated teams to focus on each area of the business. The combination of Tech Data and Scribona will become the leading value-added distributor in the region. The consolidated company will leverage existing back office teams and processes to create a business with a competitive cost structure.
For additional information, please visit www.scribona.com or www.techdata.com or contact:
Fredrik Berglund, President and CEO of Scribona, +46 8 734 34 00
Jonas Elmgren, Managing Director Nordic Region, Tech Data, +46 8 795 2015
INFORMATION ABOUT SCRIBONA AB
Scribona, quoted on the Small Cap list of the OMX Nordic Exchange, is a leading provider of IT products in the Nordic market. The product range includes Personal Computers & Peripherals, Servers, Storage & Infrastructure, Enterprise & Client Software and Entertainment & Personal Communication. The products are distributed by IT resellers and retailers in Sweden, Finland and Norway.
INFORMATION ABOUT TECH DATA AB
Tech Data AB is a wholly owned subsidiary of the Tech Data Corporation (NASDAQ GS: TECD), which was founded in 1974 and is a leading distributor of IT products, with more than 90,000 customers in over 100 countries. The company's business model enables technology solution providers, manufacturers and publishers to cost-effectively sell to and support end users ranging from small-to-midsize businesses (SMB) to large enterprises. Ranked 109th on the FORTUNE 500(R), Tech Data generated $21.4 billion in sales for its fiscal year ended January 31, 2007.