SYNNEX Corporation has entered into a new $5 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 during the second half of calendar year 2021. This timeline is 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. Sumitomo Mitsui Banking Corporation acted as a joint lead arranger and joint lead bookrunner on the term loan facility.
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