8-K: TD SYNNEX Announces Secondary Offering and Share Repurchase

TD SYNNEX has announced a secondary public offering of its common stock by Apollo Global Management affiliates and a concurrent share repurchase by the company.

Summary

• TD SYNNEX Corporation has announced a secondary public offering of 5,309,299 shares of its common stock held by entities managed by Apollo Global Management.
• These shares represent all the remaining shares owned by the Selling Stockholders.
• TD SYNNEX will not receive any proceeds from the sale of these shares.
• The company also plans to repurchase 1,750,000 shares of its common stock from the underwriters as part of the offering.
• This share repurchase will be funded from existing cash on hand and is part of the company's existing share repurchase program.
• The underwriters will not receive any compensation for the shares being repurchased by the company.
• The offering is being managed by J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Mizuho Securities USA LLC, and RBC Capital Markets, LLC.

Sentiment

Score: 6

Explanation: The announcement is neutral to slightly positive. The secondary offering could create some short-term price pressure, but the share repurchase is a positive signal. The exit of a major shareholder could also be viewed positively in the long term.

Positives

• The share repurchase program indicates confidence in the company's financial position and future prospects.
• The company is using existing cash to fund the repurchase, which avoids increasing debt.
• The exit of Apollo Global Management could reduce potential overhang on the stock.

Negatives

• The secondary offering by Apollo Global Management could create temporary downward pressure on the stock price.
• The company is using cash on hand for the share repurchase, which could reduce funds available for other purposes.

Risks

• The completion of the public offering is subject to market conditions and customary closing conditions.
• There is a risk that the offering may not be completed on the anticipated terms or at all.
• The company's future performance could be affected by various risks and uncertainties as detailed in their SEC filings.

Future Outlook

The company's future performance is subject to various risks and uncertainties, including market conditions and the completion of the public offering. The company does not undertake any obligation to update any forward-looking statements.

Management Comments

• TD SYNNEX is not selling any shares of its common stock and will not receive any proceeds from the sale of the shares by the Selling Stockholders.
• The Concurrent Share Repurchase is part of the Company's existing share repurchase program.
• The Company intends to fund the Concurrent Share Repurchase from existing cash on hand.

Industry Context

This announcement is related to the capital markets activity of TD SYNNEX and the exit of a major shareholder. It is not directly related to the company's core IT distribution business but is a significant financial event.

Comparison to Industry Standards

• Secondary offerings are a common way for large shareholders to exit their positions in publicly traded companies.
• Share repurchases are often used by companies to return value to shareholders and signal confidence in their financial health.
• The size of the offering and repurchase is significant but not unusual for a company of TD SYNNEX's size.
• Comparable companies in the IT distribution space, such as Ingram Micro, also engage in similar capital market activities.

Stakeholder Impact

• Shareholders may experience short-term price volatility due to the secondary offering.
• The share repurchase program could benefit shareholders by increasing earnings per share.
• The exit of Apollo Global Management could reduce potential overhang on the stock.

Next Steps

• The company will file a preliminary prospectus supplement and accompanying prospectus with the SEC.
• The offering will be made only by means of a written prospectus and prospectus supplement.
• The company will complete the share repurchase from the underwriters.

Key Dates

Keywords

secondary offering, share repurchase, common stock, Apollo Global Management, underwriters, TD SYNNEX, equity, capital markets