The Canadian distribution market just got a little smaller, with word Thursday that Synnex Canada has signed a definitive agreement to acquire all the assets of Supercom Canada in a deal worth appx. $36.5 million.
“Over the past twenty-four years, Frank Luk and Supercom have built an enviable reputation in the Canadian IT market,” said Kevin Murai, president and CEO of Synnex, in a statement. “We are excited to have the Supercom team as part of our company.”
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Luk (pictured), Supercom’s president, as agreed to stay on with Synnex as senior vice-president of partner advocacy. He’ll report directly to Murai and take 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.
“We are delighted to join Synnex Canada,” said Luk, in a statement. “I want to thank all my employees, vendor partners and customers for their loyalty and support to Supercom and I look forward to continuing to work with them under the combined Synnex Canada.”
With Supercom on board, Synnex Canada president Mitchell Martin is setting his sights on nothing less than dominating the Canadian market.
“With the complementary partnerships and capabilities Supercom brings, Synnex Canada looks forward to better serving its enhanced base of customer and vendor partners,” said Martin, in a statement. “I look forward to partnering with Frank to make Synnex the largest distributor in Canada.”
Supercom Canada has over 250 employees and generated approximately $440 million in its most recent fiscal year.
Under the agreement, Synnex will pay $36.5 million in cash for Supercom, including appx. $4.5 million in deferred payments, subject to certain post-closing conditions. Synnex Canada will assume approximately $30.3 million in working capital debt. The transaction, pending regulatory and other approvals, is expected to close in April.
In many ways, Synnex may have been a logical fit for Supercom. In 2001, Supercom sold its U.S. business to Synnex. At the time, Luk told CDN that Supercom just wasn’t able to bring the U.S. business to profitability.