Acquisition, Integration and Restructuring Expenses (Notes)

3 Months Ended

Apr. 30, 2019

Acquisition, Integration and Restructuring Expenses [Abstract]

Business Acquisition, Integration, Restructuring and Other Related Costs [Text Block]

NOTE 3 — ACQUISITION, INTEGRATION AND RESTRUCTURING EXPENSES

Acquisition, integration and restructuring expenses are comprised of costs related to the fiscal 2018 acquisition of Avnet, Inc.'s ("Avnet") Technology Solutions business ("TS"), as well as restructuring costs related to the Global Business Optimization Program which was initiated in fiscal 2019.

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 and 2,785,402 shares of the Company's common stock. Acquisition, integration and restructuring expenses related to the acquisition of TS are primarily comprised of restructuring costs, IT related costs, professional services, transaction related costs and other costs. Restructuring costs are comprised of severance and facility 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 includes payroll related costs including retention, stock compensation, relocation and travel expenses, incurred as part of the integration of TS.

The Company incurred no acquisition, integration and restructuring expenses related to the acquisition of TS during the three months ended April 30, 2019 and does not expect to incur any additional costs in future periods. Acquisition, integration and restructuring expenses for the three months ended April 30, 2018 related to the acquisition of TS are comprised of the following:

	Three months ended April 30,
	2018
(in thousands)
Restructuring costs	$	10,872
IT related costs	7,330
Professional services	3,567
Transaction related costs	878
Other costs	4,970
Total	$	27,617

During the three months ended April 30, 2018, the Company recorded restructuring costs related to the acquisition of TS of $3.4 million in the Americas and $7.5 million in Europe.

Global Business Optimization Program

In fiscal 2019, the Company's Board of Directors approved the Global Business Optimization Program (the "GBO Program") to increase investment in the Company’s strategic priorities and implement operational initiatives to drive productivity and enhance profitability. Under the GBO Program, the Company expects to incur cash charges of approximately $70 million to $80 million, primarily comprised of $40 million to $45 million of charges in Europe and $30 million to $35 million of charges in the Americas. It is anticipated that the majority of these charges will be incurred prior to the end of the current fiscal year. The cash charges primarily consist of severance costs, and also include professional services and other costs.

Restructuring expenses related to the GBO Program are comprised of the following:

	Three months ended April 30,				Cumulative Amounts Incurred to Date
	2019		2018
(in thousands)
Severance costs	$	4,147	$	3,269	$	30,574
Professional services and other costs	2,074		2,339		18,188
Total	$	6,221	$	5,608	$	48,762

During the three months ended April 30, 2019, the Company recorded restructuring costs related to the GBO Program in the Americas of $2.9 million, in Europe of $3.0 million and in Asia-Pacific of $0.3 million. During the three months ended April 30, 2018, the Company recorded restructuring costs related to the GBO Program in the Americas of $0.9 million and in Europe of $4.7 million. 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, 2019 related to the GBO Program is as follows:

	Three months ended April 30, 2019
	Severance			Professional services and other costs			Total
(in thousands)
Balance at January 31, 2019	$	14,798		$	631		$	15,429
Fiscal 2020 restructuring expenses	4,147			2,074			6,221
Cash payments	(5,188		)	(1,725		)	(6,913		)
Foreign currency translation	(242		)	(16		)	(258		)
Balance at April 30, 2019	$	13,515		$	964		$	14,479