NOTE 4 — ACQUISITIONS

Acquisition of TS

On February 27, 2017, Tech Data acquired all of the outstanding shares of TS for an aggregate purchase price of approximately $2.8 billion, comprised of approximately $2.5 billion in cash, including estimated closing adjustments, and 2,785,402 shares of the Company's common stock, valued at approximately $247 million based on the closing price of the Company's common stock on February 27, 2017.

The Company has accounted for the TS acquisition as a business combination and allocated the purchase price to the fair values of assets acquired and liabilities assumed. The final cash consideration is subject to certain working capital and other adjustments, as determined through the process established in the interest purchase agreement, which has not yet been agreed upon by the Company and Avnet. The Company has accrued its best estimate of the expected final purchase price and the resulting liability to Avnet. However, the final purchase price may vary significantly from these estimates once these adjustments are finalized. The impact of any adjustments to the purchase price will be recorded in the Consolidated Statement of Income in the period such change occurs.

The allocation of the purchase price to assets acquired and liabilities assumed is as follows:



(in millions)
Cash	$	176
Accounts receivable	1,830
Inventories	239
Prepaid expenses and other current assets	100
Property and equipment, net	62
Goodwill	727
Intangible assets	919
Other assets, net	151
Total assets	4,204

Other current liabilities	1,169
Revolving credit loans and long-term debt	134
Other long-term liabilities	99
Total liabilities	1,402

Purchase price	$	2,802

Identifiable intangible assets are comprised of approximately $875 million of customer relationships with a weighted-average amortization period of 14 years and $44 million of trade names with an amortization period of 5 years.

The following table presents unaudited supplemental pro forma information as if the TS acquisition had occurred at the beginning of fiscal 2017. The pro forma results presented are based on combining the stand-alone operating results of the Company and TS for the periods prior to the acquisition date after giving effect to certain adjustments related to the transaction. The pro forma results exclude any benefits that may result from potential cost synergies of the combined company and certain non-recurring costs. As a result, the pro forma information below does not purport to present what actual results would have been had the acquisition actually been consummated on the date indicated and it is not necessarily indicative of the results of operations that may result in the future.



	Three months ended April 30:
	2017
(in millions)
Pro forma net sales	$	7,694
Pro forma net income	$	36

Adjustments reflected in the pro forma results include the following:


•	Amortization of acquired intangible assets


•	Interest costs associated with the transaction


•	Removal of certain non-recurring transaction costs


•	Tax effects of adjustments based on an estimated statutory tax rate

Acquisition, integration and restructuring expenses

Acquisition, integration and restructuring expenses are primarily comprised of restructuring costs, IT related costs, professional services, transaction related costs and other costs related to the acquisition of TS. Restructuring costs are comprised of severance, facilities and other exit costs. IT related costs consist primarily of data center and non-ERP application migration and integration costs, as well as, IT related professional services. Professional services are primarily comprised of integration related activities, including professional fees for project management, accounting, tax and other consulting services. Transaction related costs primarily consist of investment banking fees, legal expenses and due diligence costs incurred in connection with the completion of the transaction. Other costs primarily consist of payroll related costs including retention, stock compensation, relocation and travel expenses, incurred as part of the integration of TS.

Acquisition, integration and restructuring expenses for the three months ended April 30, 2018 and 2017 are comprised of the following:



	Three months ended April 30,
	2018		2017
(in thousands)
Restructuring costs	$	16,480	$	10,345
IT related costs	7,330		1,770
Professional services	3,567		10,137
Transaction related costs	878		15,179
Other costs	4,970		4,635
Total	$	33,225	$	42,066

During the three months ended April 30, 2018, the Company recorded restructuring costs of $4.3 million in the Americas and $12.2 million in Europe. During the three months ended April 30, 2017, the Company recorded restructuring costs of $9.5 million in the Americas and $0.8 million in Europe. The accrued restructuring charges are included in “accrued expenses and other liabilities” in the Consolidated Balance Sheet.

Restructuring activity during the three months ended April 30, 2018 is as follows:



	Three months ended April 30, 2018
	Severance			Facility and Other Costs			Total
(in thousands)
Balance at January 31, 2018	$	13,366		$	1,630		$	14,996
Fiscal 2019 restructuring expenses	12,412			4,068			16,480
Cash payments	(5,747		)	(1,620		)	(7,367		)
Foreign currency translation	(385		)	(75		)	(460		)
Balance at April 30, 2018	$	19,646		$	4,003		$	23,649