Earlier this month, the Canadian distribution scene got a little smaller when Synnex Canada announced a definitive agreement to acquire the assets of rival Supercom Canada in a $36.5 million deal.
Under the deal, Supercom founder Frank Luk will remain with Synnex, reporting directly to president and CEO Kevin Murai with responsibility for owning and further developing key vendor and customer partnerships for the U.S., Canada, and Japan, as well as assisting with the integration of the companies.
Synnex Canada president Mitchell Martin (pictured at right) recently spoke with CDN to discuss the acquisition, how the two distributors fit together, and Synnex Canada’s plans for the future. The following is an edited transcript.
CDN: How did the deal with Supercom come together?
Mitchell Martin: I’ve been close friends with Frank (Luk) for decades, and our founder Bob Long and Frank go way back. Kevin Murai, our CEO, and Frank know each other as well. We buy from Frank, and Frank buys from us. We’ve always been pretty close. Really, it’s related to personal decisions that Frank made.
CDN: How important was Luk staying on to doing this deal?
Martin: We’re really excited about Frank joining the team. We believe he can help grow our business on a global basis, and leverage the relationships he has with key customers. For now, he’ll be based in Canada.
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CDN: Will there be any layoffs?
Martin: We do plan a full integration. Our strategy is to limit redundancy by aggressively staffing for growth and sunergy.
CDN: Will you be keeping Supercom’s facilities?
Martin: We haven’t completed a facilities plan. Ultimately, we need to be where our customers need us to be. That’s the first concern. Second, we want to have facilities that can handle the company’s total requirements. So it will likely take us some time to get to that end state.
CDN: What does the fit look like between you and Supercom in terms of linecard, customers, and so on?
Martin: The overlap is high, although there’s lots of differences in terms of strength and market position We plan to have the best of both worlds, and there lay the synergies. With vendors where Synnex is particularly strong, we’ll leverage that strength to sell to customers segments Frank has never sold to. The flip side is he has some very strong customer relationships as well, and suddenly the Synnex line card is much broader than Frank’s, with a very rich portfolio in business and enterprise.
CDN: Supercom catered to a certain size and type of reseller, offering them a certain level of service. Will you be able to maintain those levels of service as a larger distributor?
Martin: Culturally we’re very similar with respect to our philosophy on managing relationships on a face-to-face basis. We’ve always been very focused on that. Our heritage has been smaller customers, and we’re proud of our ability to service smaller customers. So from that standpoint, we’re very much aligned.
CDN: You mentioned in the news release announcing the acquisition that you want Synnex to be the largest distributor in Canada. How are you going to get there?
Martin: Most of us don’t break out Canada in our public disclosures. Having said that, based on market intelligence we think we will be one of the largest distributors in Canada as a result of this deal.
CDN: What’s next?
Martin. We plan on closing some time between March 31st and April 15th, and once we close we expect to be fully integrated. This acquisition really demonstrates our continue investment and commitment to the Canadian geography, and the fact that Canada is very strategic for Synnex. It’s great news for our vendor and partner channels.
