Acquisition, Integration and Restructuring Expenses (Notes)

6 Months Ended

Jul. 31, 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 (income) 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 (income) costs includes a gain of $9.6 million related to the final working capital adjustment for the acquisition of TS as part of a settlement agreement with Avnet, as well as 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 and six months ended July 31, 2019 and does not expect to incur any additional costs in future periods. Acquisition, integration and restructuring expenses for the three and six months ended July 31, 2018 related to the acquisition of TS are comprised of the following:

	Three months ended July 31,			Six months ended July 31,
	2018			2018
(in thousands)
Restructuring costs	$	3,777		$	14,649
IT related costs	1,156			8,486
Professional services	839			4,406
Transaction related costs	315			1,193
Other (income) costs	(5,525		)	(555		)
Total	$	562		$	28,179

During the three months ended July 31, 2018, the Company recorded restructuring costs related to the acquisition of TS of $0.1 million in the Americas and $3.7 million in Europe. During the six months ended July 31, 2018, the Company recorded restructuring costs related to the acquisition of TS of $3.5 million in the Americas and $11.1 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 July 31,				Six months ended July 31,				Cumulative Amounts Incurred to Date
	2019		2018		2019		2018
(in thousands)
Severance costs	$	3,187	$	5,605	$	7,334	$	8,874	$	33,761
Professional services and other costs	2,022		7,130		4,096		9,469		20,210
Total	$	5,209	$	12,735	$	11,430	$	18,343	$	53,971

Restructuring costs related to the GBO Program by segment are as follows:

	Three months ended July 31,				Six months ended July 31,
	2019		2018		2019		2018
(in thousands)
Americas	$	1,341	$	6,485	$	4,252	$	7,336
Europe	3,229		6,125		6,253		10,882
Asia-Pacific	639		125		925		125
Total	$	5,209	$	12,735	$	11,430	$	18,343

Restructuring activity during the six months ended July 31, 2019 related to the GBO Program is as follows:

	Six months ended July 31, 2019
	Severance			Professional services and other costs			Total
(in thousands)
Balance at January 31, 2019	$	14,798		$	631		$	15,429
Fiscal 2020 restructuring expenses	7,334			4,096			11,430
Cash payments	(10,297		)	(3,825		)	(14,122		)
Foreign currency translation	(220		)	(15		)	(235		)
Balance at July 31, 2019	$	11,615		$	887		$	12,502