What changed in this filing

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Item 1. Financial Statements

2021-10-05 compared with 2021-07-07 · 253 added, 170 removed, 680 unchanged (38% of the section changed)

3 unchanged sentences

(currency and share amounts in thousands, except par value)

August 31, 2021

November 30, 2020

28 unchanged sentences

Preferred stock, $ 0.001 par value, 5,000 shares authorized, no shares issued or outstanding

Common stock, $ 0.001 par value, 100,000 shares authorized, 53,775 and 53,671 shares issued as of May 31, 2021 and November 30, 2020, respectively

Common stock, $ 0.001 par value, 200,000 shares authorized, 53,855 and 53,671 shares issued as of August 31, 2021 and November 30, 2020, respectively

Additional paid-in capital

Treasury stock, 2,548 and 2,538 shares as of May 31, 2021 and November 30, 2020, respectively

Treasury stock, 2,550 and 2,538 shares as of August 31, 2021 and November 30, 2020, respectively

Accumulated other comprehensive income (loss)

8 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

Cost of revenue

2 unchanged sentences

Interest expense and finance charges, net

Other expense, net

Other income (expense), net

Income from continuing operations before income taxes

11 unchanged sentences

SYNNEX CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(currency in thousands)

Three Months Ended

Six Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

Other comprehensive income (loss):

Change in unrealized gains or losses of defined benefit plans, net of taxes of $ 0 for the three and six months ended May 31, 2021 and May 31, 2020

Unrealized gains (losses) on cash flow hedges during the period, net of taxes of $ 579 and $ 541 for the three and six months ended May 31, 2021, respectively, and $ 6,210 and $ 16,174 for the three and six months ended May 31, 2020, respectively

Reclassification of net (gains) losses on cash flow hedges to net income, net of tax expense (benefit) of ($ 2,621 ) and ($ 5,159 ) for the three and six months ended May 31, 2021, respectively, and ($ 904 ) and ($ 557 ) for the three and six months ended May 31, 2020, respectively

Change in unrealized gains or losses of defined benefit plans, net of taxes of $ 0 for the three and nine months ended August 31, 2021, and $ 3,115 for the three and nine months ended August 31, 2020

Unrealized gains (losses) on cash flow hedges during the period, net of taxes of ($ 184 ) and $ 357 for the three and nine months ended August 31, 2021, respectively, and ($ 8,220 ) and $ 7,953 for the three and nine months ended August 31, 2020, respectively

Reclassification of net (gains) losses on cash flow hedges to net income, net of tax expense (benefit) of ($ 2,636 ) and ($ 7,796 ) for the three and nine months ended August 31, 2021, respectively, and ($ 563 ) and ($ 1,120 ) for the three and nine months ended August 31, 2020, respectively

Total change in unrealized gains (losses) on cash flow hedges, net of taxes

Foreign currency translation adjustments, net of taxes of ($ 400 ) and ($ 1,244 ) for the three and six months ended May 31, 2021, respectively, and $ 148 and $ 294 for the three and six months ended May 31, 2020, respectively

Foreign currency translation adjustments, net of taxes of $ 308 and ($ 936 ) for the three and nine months ended August 31, 2021, respectively, and ($ 345 ) and ($ 51 ) for the three and nine months ended August 31, 2020, respectively

Other comprehensive income (loss)

Comprehensive income (loss)

Comprehensive income

(Amounts may not add due to rounding)

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

Total Stockholders' equity, beginning balance

26 unchanged sentences

(currency in thousands)

Six Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

Cash flows from operating activities:

24 unchanged sentences

Net transfer of cash and cash equivalents to Concentrix

Net cash used in financing activities

Proceeds from issuance of Bonds

Debt issuance cost

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash, cash equivalents and restricted cash

10 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and six months ended May 31, 2021 and 2020

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

7 unchanged sentences

Beginning December 1, 2020, the Company no longer consolidates Concentrix within its financial results or reflects the financial results of Concentrix within its continuing results of operations.

The financial results of Concentrix for the three and six months ended May 31, 2020 are presented as income from discontinued operations, net of taxes on the Consolidated Statements of Operations and its assets and liabilities as of November 30, 2020 are presented as discontinued operations in the Consolidated Balance Sheets.

The financial results of Concentrix for the three and nine months ended August 31, 2020 are presented as income from discontinued operations, net of taxes on the Consolidated Statements of Operations and its assets and liabilities as of November 30, 2020 are presented as discontinued operations in the Consolidated Balance Sheets.

The historical statements of comprehensive income, cash flows and the balances in stockholders' equity have not been revised to reflect the effect of the Separation.

2 unchanged sentences

In connection with the Separation, the Company and Concentrix entered into a separation and distribution agreement as well as various other agreements that provide a framework for the relationships between the parties going forward, including among others an employee matters agreement, a tax matters agreement, and a commercial agreement, pursuant to which Concentrix will continue to provide certain limited services to SYNNEX following the Separation.

The accompanying interim unaudited Consolidated Financial Statements as of May 31, 2021 and for the three and six months ended May 31, 2021 and 2020 have been prepared by the Company in accordance with the rules and regulations of the Securities and Exchange Commission.

The accompanying interim unaudited Consolidated Financial Statements as of August 31, 2021 and for the three and nine months ended August 31, 2021 and 2020 have been prepared by the Company in accordance with the rules and regulations of the Securities and Exchange Commission.

The amounts as of November 30, 2020 have been derived from the Company’s annual audited financial statements.

2 unchanged sentences

These financial statements should be read in conjunction with the annual audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2020.

On March 22, 2021, the Company entered into an agreement and plan of merger (the “Merger Agreement”) to acquire 100 % of Tiger Parent (AP) Corporation, the parent company of Tech Data Corporation (“Tech Data”), in a cash and stock transaction (the "Merger").

On September 1, 2021, pursuant to the terms of the Merger Agreement, the Company acquired all the outstanding shares of common stock of Tiger Parent (AP) Corporation for consideration of $ 1.61 billion in cash and 44 million shares of common stock of SYNNEX.

The combined company is referred to as TD SYNNEX.

See Note 17 – Subsequent Event for further discussion.

Interim results of operations are not necessarily indicative of financial results for a full year, and the Company makes no representations related thereto.

2 unchanged sentences

For a discussion of the Company’s significant accounting policies, refer to the discussion in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2020.

Accounting pronouncements adopted during the six months ended May 31, 2021 are discussed below.

Accounting pronouncements adopted during the nine months ended August 31, 2021 are discussed below.

Use of Estimates

2 unchanged sentences

The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and work force participation and created volatility and disruption of financial markets, the impact of which was most acute during the second quarter of fiscal year 2020.

As of May 31, 2021, due to the ongoing impact of the COVID-19 pandemic on the Company’s business, many of the estimates and assumptions required increased judgment and carry a higher degree of variability and volatility.

As events continue to evolve and additional information becomes available, these estimates may change in future periods.

Actual results could differ from the estimates.

Despite improvements in the global economy since

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and six months ended May 31, 2021 and 2020

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

the onset of the pandemic, the resurgence of the Delta variant and other mutations bring uncertainty to continued economic recovery.

As a result, the Company cannot at this time accurately predict what effects these conditions will have on its operations and financial condition, including due to the uncertainties relating to the severity and duration of the pandemic, the effect on its customers and customer demand and the length of the restrictions and closures imposed by various governments.

Consequently, many of the estimates and assumptions required increased judgment and carry a higher degree of variability and volatility.

As events continue to evolve and additional information becomes av ailable, these estimates may change in future periods.

Actual results could differ from the estimates.

Concentration of credit risk

1 unchanged sentence

The Company’s cash and cash equivalents and derivative instruments are transacted and maintained with financial institutions with high credit standing, and their compositions and maturities are regularly monitored by management.

Through May 31, 2021, the Company has not experienced any credit losses on such deposits and derivative instruments.

Through August 31, 2021, the Company has not experienced any credit losses on such deposits and derivative instruments.

Accounts receivable include amounts due from customers, including related party customers.

4 unchanged sentences

The Company also considers risks attributed to COVID-19 in establishing the required allowances.

Through May 31, 2021, such losses have been within management’s expectations.

One customer accounted for 25 % and 22 % of the Company’s total revenue during the three and six months ended May 31, 2021, respectively.

The same customer accounted for 23 % and 21 % of the Company’s total revenue during the three and six months ended May 31, 2020, respectively.

Products purchased from the Company’s largest OEM supplier, HP Inc., accounted for approximately 13 % and 14 % of total revenue during the three and six months ended May 31, 2021, respectively, and approximately 15 % of total revenue during both the three and six months ended May 31, 2020.

As of May 31, 2021 and November 30, 2020, one customer comprised 20 % and 15 %, respectively, of the consolidated accounts receivable balance.

Through August 31, 2021, such losses have been within management’s expectations.

One customer accounted for 23 % and 29 % of the Company’s total revenue during the three and nine months ended August 31, 2021, respectively.

The same customer accounted for 23 % and 22 % of the Company’s total revenue during the three and nine months ended August 31, 2020, respectively.

Products purchased from the Company’s largest OEM supplier, HP Inc., accounted for approximately 13 % of total revenue during both the three and nine months ended August 31, 2021, respectively, and approximately 15 % of total revenue during both the three and nine months ended August 31, 2020.

As of August 31, 2021 and November 30, 2020, one customer comprised 25 % and 15 %, respectively, of the consolidated accounts receivable balance.

Inventories are stated at the lower of cost and net realizable value.

9 unchanged sentences

The Company also designs and integrates data center equipment built specific to the customers' data center environment.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

Revenue Recognition

9 unchanged sentences

Service revenues represents less than 10 % of the total revenue for the periods presented.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and six months ended May 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

Provisions for sales returns and allowances are estimated based on historical data and are recorded concurrently with the recognition of revenue.

27 unchanged sentences

The Company is currently evaluating the impact of the new guidance.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

NOTE 3—DISCONTINUED OPERATIONS:

1 unchanged sentence

Three Months Ended

Six months ended

Nine Months Ended

August 31, 2020

Costs and expenses

3 unchanged sentences

Income from discontinued operations, net of taxes

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and six months ended May 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

There were no revenues earned or cost and expenses incurred of discontinued operations during the three and six months ended May 31, 2021.

There were no non-cash items or capital expenditures of discontinued operations during the six months ended May 31, 2021.

During the six months ended May 31, 2020, significant non-cash items and capital expenditures of discontinued operations included in the consolidated statement of cash flows are outlined below:

Six months ended

There were no revenues earned or cost and expenses incurred of discontinued operations during the three and nine months ended August 31, 2021.

There were no non-cash items or capital expenditures of discontinued operations during the nine months ended August 31, 2021.

During the nine months ended August 31, 2020, significant non-cash items and capital expenditures of discontinued operations included in the consolidated statement of cash flows are outlined below:

Nine Months Ended

August 31, 2020

Operating activities:

6 unchanged sentences

Purchases of property and equipment

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

The following table presents assets and liabilities that were transferred to Concentrix as of December 1, 2020 and presented as discontinued operations in the Consolidated Balance Sheet as of November 30, 2020:

22 unchanged sentences

The Company recognizes share-based compensation expense for all share-based awards made to employees and directors, including employee stock options, restricted stock awards, restricted stock units, performance-based restricted stock units and employee stock purchases, based on estimated fair values.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and six months ended May 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

The following table summarizes the number of share-based awards granted under the Company’s stock incentive plans, during the three and six months ended May 31, 2021 and 2020, and the measurement-date fair value of those awards:

The following table summarizes the number of share-based awards granted under the Company’s stock incentive plans, during the three and nine months ended August 31, 2021 and 2020, and the measurement-date fair value of those awards:

Three Months Ended

Six Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

Stock options

2 unchanged sentences

* Less than a thousand units.

The Company recorded share-based compensation expense in the Consolidated Statements of Operations for the three and six months ended May 31, 2021 and 2020 as follows:

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

The Company recorded share-based compensation expense in the Consolidated Statements of Operations for the three and nine months ended August 31, 2021 and 2020 as follows:

Three Months Ended

Six Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

Total share-based compensation (recorded in selling, general and

12 unchanged sentences

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same amounts shown in the Consolidated Statements of Cash Flows:

August 31, 2021

November 30, 2020

3 unchanged sentences

Accounts receivable, net:

August 31, 2021

November 30, 2020

3 unchanged sentences

Receivables from vendors, net:

August 31, 2021

November 30, 2020

2 unchanged sentences

Receivables from vendors, net

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and six months ended May 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

Property and equipment, net:

August 31, 2021

November 30, 2020

6 unchanged sentences

Property and equipment, net

Depreciation expense was $ 5,668 and $ 11,167 , respectively, for the three and six months ended May 31, 2021 and $ 5,837 and $ 11,701 , respectively, for the three and six months ended May 31, 2020.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

Depreciation expense was $ 5,633 and $ 16,800 , respectively, for the three and nine months ended August 31, 2021 and $ 5,937 and $ 17,650 , respectively, for the three and nine months ended August 31, 2020.

Balance as of November 30, 2020

Foreign exchange translation

Balance as of May 31, 2021

Balance as of August 31, 2021

Intangible assets, net:

As of May 31, 2021

As of August 31, 2021

As of November 30, 2020

1 unchanged sentence

Trade name and others

Amortization expense was $ 9,373 and $ 18,742 , respectively, for the three and six months ended May 31, 2021 and $ 9,947 and $ 20,135 , respectively, for the three and six months ended May 31, 2020.

Amortization expense was $ 9,386 and $ 28,128 , respectively, for the three and nine months ended August 31, 2021 and $ 9,995 and $ 30,130 , respectively, for the three and nine months ended August 31, 2020.

Estimated future amortization expense of the Company’s intangible assets is as follows:

Fiscal years ending November 30,

2021 (remaining six months)

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and six months ended May 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

2021 (remaining three months)

Accumulated other comprehensive income (loss):

11 unchanged sentences

income (loss)

Balance as of May 31, 2021

Balance as of August 31, 2021

Refer to Note 6 - Derivative Instruments for the location of gains and losses reclassified from other comprehensive income to the Consolidated Statements of Operations.

Foreign currency translation adjustment and other, net of taxes, is comprised of foreign currency translation adjustments and unrealized gains and losses on Concentrix’ available-for-sale debt securities prior to the Separation.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

NOTE 6—DERIVATIVE INSTRUMENTS:

16 unchanged sentences

Any subsequent changes in fair value of such derivative instruments are recorded in earnings unless they are re-designated as hedges of other transactions.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and six months ended May 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

Non-Designated Derivatives

5 unchanged sentences

Balance Sheet Line Item

August 31, 2021

November 30, 2020

9 unchanged sentences

Volume of Activity

The notional amounts of foreign exchange forward contracts represent the gross amounts of foreign currency, including, principally, the Canadian Dollar, the Brazilian Real, the Euro, the Colombian Peso, the Chilean Peso, the Indian Rupee, the Chinese Yuan and the Japanese Yen, that will be bought or sold at maturity.

The notional amounts of foreign exchange forward contracts represent the gross amounts of foreign currency, including, principally, the Canadian Dollar, the Indian Rupee, the Brazilian Real, the Colombian Peso, the Euro, the Mexican Peso, the Chinese Yuan, and the Chilean Peso, that will be bought or sold at maturity.

The term and notional amount of interest rate swaps are determined based on management’s assessment of future interest rates and other factors such as debt maturities.

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and six months ended May 31, 2021 and 2020

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

2 unchanged sentences

Three Months Ended,

Six Months Ended,

Nine Months Ended,

Location of Gains (Losses) in Income

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

Interest expense and finance charges, net

Other expense, net

Other income (expense), net

Derivative instruments designated as cash flow hedges:

4 unchanged sentences

Gains (losses) recognized from foreign exchange forward contracts, net ( 1)

Other expense, net

Other income (expense), net

Gains (losses) recognized from interest rate swaps, net

7 unchanged sentences

In the Consolidated Balance Sheets, the Company does not offset derivative assets against liabilities in master netting arrangements.

If derivative exposures covered by a qualifying master netting agreement had been netted in the Consolidated Balance Sheets, the total derivative asset and liability positions would have been reduced by $ 257 each as of May 31, 2021 and $ 139 each as of November 30, 2020.

If derivative exposures covered by a qualifying master netting agreement had been netted in the Consolidated Balance Sheets, the total derivative asset and liability positions would have been reduced by $ 630 each as of August 31, 2021 and $ 139 each as of November 30, 2020.

Credit exposure for derivative financial instruments is limited to the amounts, if any, by which the counterparties’ obligations under the contracts exceed the Company’s obligations to the counterparties.

7 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and six months ended May 31, 2021 and 2020

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

The following table summarizes the valuation of the Company’s investments and financial instruments that are measured at fair value on a recurring basis:

As of May 31, 2021

As of August 31, 2021

As of November 30, 2020

11 unchanged sentences

Fair values of interest rate swaps are measured using standard valuation models using inputs that are readily available in public markets, or can be derived from observable market transactions, including LIBOR spot and forward rates.

The effect of nonperformance risk on the fair value of derivative instruments was not material as of May 31, 2021 and November 30, 2020.

The effect of nonperformance risk on the fair value of derivative instruments was not material as of August 31, 2021 and November 30, 2020.

The carrying values of accounts receivable, accounts payable and short-term debt approximate fair value due to their short maturities and interest rates which are variable in nature.

The carrying value of the Company’s term loans approximate their fair value since they bear interest rates that are similar to existing market rates.

During the six months ended May 31, 2021, there were no transfers between the fair value measurement category levels.

During the nine months ended August 31, 2021, there were no transfers between the fair value measurement category levels.

NOTE 8—ACCOUNTS RECEIVABLE ARRANGEMENTS:

1 unchanged sentence

Available capacity under this program is dependent on the level of the Company’s trade accounts receivable with these customers and the financial institution’s willingness to purchase such receivables.

As of May 31, 2021 and November 30, 2020, accounts receivable sold to and held by the financial institution under this program were $ 13,872 and $ 15,572 , respectively.

As of August 31, 2021 and November 30, 2020, accounts receivable sold to and held by the financial institution under this program were $ 19,317 and $ 15,572 , respectively.

Discount fees related to the sale of trade accounts receivable under this facility are included in “Interest expense and finance charges, net” in the Consolidated Statements of Operations.

During the three and six months ended May 31, 2021 and 2020, discount fees were not material to the Company’s results of operations.

During the three and nine months ended August 31, 2021 and 2020, discount fees were not material to the Company’s results of operations.

SYNNEX Japan, the Company’s Japanese subsidiary, has arrangements with financial institutions for the sale and financing of approved accounts receivable and notes receivable.

The amounts outstanding under these arrangements that were sold, but not collected, as of May 31, 2021 and November 30, 2020 were $ 58,254 and $ 5,798 , respectively.

The amounts outstanding under these arrangements that were sold, but not collected, as of August 31, 2021 and November 30, 2020 were $ 29,366 and $ 5,798 , respectively.

Discount fees related to the sale of trade accounts and notes receivable under this facility are included in “Interest expense and finance charges, net” in the Consolidated Statements of Operations.

During the three and six months ended May 31, 2021 and 2020, discount fees were not material to the Company’s results of operations.

During the three and nine months ended August 31, 2021 and 2020, discount fees were not material to the Company’s results of operations.

The Company also has other financing agreements in North America with financial institutions (“Flooring Companies”) to allow certain customers of the Company to finance their purchases directly with the Flooring Companies.

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and six months ended May 31, 2021 and 2020

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

Net sales financed

1 unchanged sentence

Flooring fees are included within “Interest expense and finance charges, net.”

As of May 31, 2021 and November 30, 2020, accounts receivable subject to flooring agreements were $ 38,940 and $ 49,461 , respectively.

As of August 31, 2021 and November 30, 2020, accounts receivable subject to flooring agreements were $ 42,114 and $ 49,461 , respectively.

NOTE 9—BORROWINGS:

Borrowings consist of the following:

August 31, 2021

November 30, 2020

5 unchanged sentences

SYNNEX United States term loan credit agreement

SYNNEX Japan credit facility - term loan component

SYNNEX new Senior Notes

Other term debt

14 unchanged sentences

Under the terms of the U.S.

Arrangement, the Company and two of its U.S.

AR Arrangement, the Company and two of its U.S.

subsidiaries sell, on a revolving basis, their receivables to a wholly-owned, bankruptcy-remote subsidiary.

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and six months ended May 31, 2021 and 2020

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

8 unchanged sentences

SYNNEX Canada pays a fee of 0.40 % per annum for any unused portion of the commitment up to CAD 60,000 , or $ 47,559 , and when the unused portion exceeds CAD 60,000 , or $ 47,559 , a fee of 0.55 % per annum of the unused portion of the commitment.

As of both May 31, 2021 and November 30, 2020, there was no outstanding balance under this arrangement.

As of both August 31, 2021 and November 30, 2020, there was no outstanding balance under this arrangement.

The Company has guaranteed the performance obligations of SYNNEX Canada under this facility.

1 unchanged sentence

SYNNEX Japan has a credit agreement with a group of banks for a maximum commitment of JPY 15,000,000 , or $ 136,351 .

The credit agreement is comprised of a JPY 7,000,000 , or $ 63,874 , term loan and a JPY 8,000,000 , or $ 72,999 , revolving credit facility and expires in November 2021 .

The interest rate for the term loan and revolving credit facility is based on the Tokyo Interbank Offered Rate, plus a margin, which is based on the Company’s consolidated leverage ratio, and currently equals 0.70 % per annum.

The unused line fee on the revolving credit facility is currently 0.10 % per annum based on the Company's consolidated current leverage ratio.

The credit agreement is comprised of a JPY 5,000,000 , or $ 45,450 , term loan and a JPY 10,000,000 , or $ 90,901 , revolving credit facility and expires in June 2026 .

Prior to renewal in June 2021, SYNNEX Japan had a maximum commitment of JPY 15,000,000 , or $ 136,351 , comprised of a JPY 7,000,000 , or $ 63,631 , term loan and a JPY 8,000,000 , or $ 72,721 , revolving credit facility.

The interest rate for the term loan and revolving credit facility is based on the Tokyo Interbank Offered Rate, plus a margin, which, prior to the Merger transaction was based on the Company’s consolidated leverage ratio, and after the Merger transaction is based on the Company’s credit rating.

Currently the margin over the Tokyo Interbank Offered Rate equals 0.80 % per annum.

The unused line fee on the revolving credit facility is currently 0.125 % per annum and prior to the Merger was based on the Company's consolidated current leverage ratio, but is now also based on the Company’s credit rating.

The term loan can be repaid at any time prior to the expiration date without penalty.

18 unchanged sentences

Term Loan Credit Agreement (defined below) pursuant to an intercreditor agreement and are guaranteed by certain of the Company's United States domestic subsidiaries.

Credit Agreement was terminated on September 1, 2021 and all outstanding balances were repaid in full as part of the Merger transaction (see Note 17 – Subsequent Event for further discussion).

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

SYNNEX United States term loan credit agreement

13 unchanged sentences

Credit Agreement pursuant to an intercreditor agreement, and are guaranteed by certain of its domestic subsidiaries.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and six months ended May 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

SYNNEX new c redit agreement

In connection with the Merger Agreement described in Note 17 - Pending Merger, the Company has entered into a new credit agreement, dated as of April 16, 2021 (the “New Credit Agreement”) with the lenders party thereto and Citibank, N.A., as agent, pursuant to which the Company has received commitments for the extension of a senior unsecured revolving credit facility not to exceed an aggregate principal amount of $ 3,500,000 , including a $ 200,000 letter of credit sub-facility, which revolving credit facility (the “new revolving credit facility”) may, subject to the lenders’ discretion, potentially be increased by up to an aggregate amount of $ 500,000 and for the extension of a senior unsecured term loan (the “new term loan” and, together with the new revolving credit facility, the “new credit facilities”) in an aggregate principal amount not to exceed $ 1,500,000 .

The commitments under the new credit facilities are subject to customary conditions.

Term Loan Credit Agreement was terminated on September 1, 2021 and all outstanding balances were repaid in full as part of the Merger transaction (see Note 17 – Subsequent Event for further discussion).

SYNNEX new credit agreement

In connection with the Merger Agreement described in Note 17 – Subsequent Event, the Company entered into a new credit agreement, dated as of April 16, 2021 (the “New Credit Agreement”) with the lenders party thereto and Citibank, N.A., as agent, pursuant to which the Company received commitments for the extension of a senior unsecured revolving credit facility not to exceed an aggregate principal amount of $ 3,500,000 , which revolving credit facility (the “new revolving credit facility”) may, at the request of the Company but subject to the lenders’ discretion, potentially be increased by up to an aggregate amount of $ 500,000 .

The New Credit Agreement also includes a senior unsecured term loan (the “new term loan” and, together with the new revolving credit facility, the “new credit facilities”) in an aggregate principal amount of $ 1,500,000 , which was fully funded in connection with the closing of the Merger.

The borrower under the new credit facilities is the Company.

There are no guarantors of the new credit facilities.

The commitments under the new credit facilities terminate upon the earliest to occur of (i) with respect to the revolving commitments, the fifth anniversary of the closing date (subject to two one-year extensions upon the Company’s prior notice to the lenders and the agreement of the lenders to extend such maturity date), (ii) in the event SYNNEX voluntarily elects to reduce such commitments to zero, on such date, or subject to certain conditions, following an event of default, (iii) if the closing does not occur prior to such date, five business days after the termination date of the Merger Agreement, and (iv) the date that the Merger Agreement is terminated by SYNNEX in a signed writing in accordance with the terms of the Merger Agreement.

The funding under the new credit facilities is subject to customary closing conditions.

The proceeds of the loans under the new term loan will be used to provide a portion of the debt financing required to refinance certain indebtedness of the Company and Tech Data, which is required to consummate the proposed transactions related to the Merger, together with the payment of related fees and expenses, and the borrowings (if any) under the new revolving credit facility on the closing date of the proposed transactions will be used to pay fees and expenses related to the Merger and related transactions.

After the closing date, the revolving credit facility will, subject to customary conditions, be available for general corporate purposes or any other purpose not prohibited by the New Credit Agreement.

The outstanding principal amount of the term loan will be, once advanced, payable in quarterly installments in an amount equal to 1.25% of the original principal balance commencing on the last day of the first full fiscal quarter after the closing date of the new credit facilities, with the outstanding principal amount of the term loans due in full on the maturity date.

The maturity of the new credit facilities is on the fifth anniversary of the September 2021 closing date, which will occur in September 2026, subject in the case of the revolving credit facility, to two one-year extensions upon the Company’s prior notice to the lenders and the agreement of the lenders to extend such maturity date.

The outstanding principal amount of the new term loan is payable in quarterly installments in an amount equal to 1.25% of the original $ 1,500,000 principal balance commencing on the last day of the first full fiscal quarter after the closing date of the new credit facilities, with the outstanding principal amount of the term loans due in full on the maturity date.

Loans borrowed under the New Credit Agreement bear interest, in the case of LIBOR (or successor) rate loans, at a per annum rate equal to the applicable LIBOR (or successor) rate, plus the applicable margin, which may range from 1.125 % to 1.75 %, based on the Company’s public debt rating (as defined in the New Credit Agreement).

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In addition to these borrowing rates, there is a commitment fee which ranges from 0.125 % to 0.300 % on any unused commitment under the new revolving credit facility based on the Company’s public debt rating.

The New Credit Agreement contains various loan covenants that will restrict the ability of the Company and its subsidiaries to take certain actions that are customary for similar facilities for similarly rated borrowers.

The New Credit Agreement also contains financial covenants which will require compliance with a maximum debt to EBITDA ratio and a minimum interest coverage ratio, in each case tested on the last day of any fiscal quarter commencing with the first full fiscal quarter to occur after the closing date of the new credit facilities.

The New Credit Agreement contains various loan covenants that are customary for similar facilities for similarly rated borrowers that will restrict the ability of the Company and its subsidiaries to take certain actions.

The New Credit Agreement also contains financial covenants which require compliance with a maximum debt to EBITDA ratio and a minimum interest coverage ratio, in each case tested on the last day of each fiscal quarter commencing with the first full fiscal quarter to occur after the closing date of the new credit facilities.

The New Credit Agreement also contains various customary events of default, including with respect to a change of control of the Company.

See Note 17 – Subsequent Event for further discussion regarding borrowings under the New Credit Agreement in conjunction with the Merger.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

On March 22, 2021, the Company had entered into a debt commitment letter (the “Commitment Letter”), under which Citigroup Global Markets Inc.

and certain other financing institutions joining thereto pursuant to the terms thereof committed to provide ( i ) a $ 1.5 billion senior unsecured term bridge facility (the "Term Loan A Bridge Facility"), (ii) a $ 2.5 billion senior unsecured term bridge facility (the “Bridge Facility”) and (iii) a $ 3.5 billion senior unsecured revolving bridge facility (the "Bridge Revolving Facility"), subject to the satisfaction of certain customary closing conditions.

On April 16, 2021, (i) the $ 1.5 billion commitment with respect to Term Loan A Bridge Facility under the Commitment Letter and (ii) the $ 3.5 billion commitment with respect to Bridge Revolving Facility under the Commitment Letter were reduced to zero , in each case, as a result of SYNNEX entering into the New Credit Agreement.

On April 16, 2021, ( i ) the $ 1.5 billion commitment with respect to the Term Loan A Bridge Facility under the Commitment Letter and (ii) the $ 3.5 billion commitment with respect to the Bridge Revolving Facility under the Commitment Letter were reduced to zero , in each case, as a result of SYNNEX entering into the New Credit Agreement ;

and on August 9, 2021 the Bridge Facility was reduced to zero as a result of the issuance of the Notes described below.

SYNNEX new Senior Notes

On August 9, 2021, SYNNEX completed its offering of $ 2.5 billion aggregate principal amount of senior unsecured notes, consisting of $ 700.0 million of 1.25 % senior notes due 2024 , $ 700.0 million of 1.75 % senior notes due 2026 , $ 600.0 million of 2.375 % senior notes due 2028 , and $ 500.0 million of 2.65 % senior notes due 2031 (collectively, the “Notes,” and such offering, the “Notes Offering”).

SYNNEX incurred $ 27 million towards issuance costs.

SYNNEX will pay interest semi-annually on the notes on each of February 9 and August 9, beginning February 9, 2022.

The net proceeds from this offering were used to fund a portion of the aggregate cash consideration payable in connection with the Merger, refinance certain of SYNNEX’ and Tech Data’s existing indebtedness and pay related fees and expenses (see Note 17 – Subsequent Event for further discussion).

SYNNEX expects to use any remaining net proceeds from the Notes Offering for general corporate purposes.

SYNNEX Canada revolving line of credit

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The base rate could be a Banker's Acceptance Rate, a Canadian Prime Rate, LIBOR or U.S.

As of both May 31, 2021 and November 30, 2020, there were no borrowings outstanding under this credit facility.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and six months ended May 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

As of both August 31, 2021 and November 30, 2020, there were no borrowings outstanding under this credit facility.

Other borrowings and term debt

Other borrowings and term debt include lines of credit with financial institutions at certain locations outside the United States, factoring of accounts receivable with recourse provisions, capital leases, a building mortgage and book overdrafts.

As of May 31, 2021, commitments for these revolving credit facilities aggregated $ 45,625 .

Other borrowings and term debt include lines of credit with financial institutions at certain locations outside the United States, factoring of accounts receivable with recourse provisions, finance leases, a building mortgage and book overdrafts.

Interest rates and other terms of borrowing under these lines of credit vary by country, depending on local market conditions.

Borrowings under these lines of credit facilities are guaranteed by the Company or secured by eligible accounts receivable.

The maximum commitment amounts for local currency credit facilities have been translated into United States Dollars at May 31, 2021 exchange rates.

The maximum commitment amounts for local currency credit facilities have been translated into United States Dollars at August 31, 2021 exchange rates.

Future principal payments

As of May 31, 2021, future principal payments under the above loans are as follows:

As of August 31, 2021, future principal payments under the above loans are as follows:

Fiscal Years Ending November 30,

2021 (remaining six months)

2021 (remaining three months)

Interest expense and finance charges

The total interest expense and finance charges for the Company's borrowings were $ 23,561 and $ 47,866 , respectively, for the three and six months ended May 31, 2021, and $ 34,855 and $ 72,303 , respectively for the three and six months ended May 31, 2020.

The variable interest rates ranged between 0.77 % and 4.46 % during both the three and six months ended May 31, 2021 and between 0.77 % and 8.41 % during both the three and six months ended May 31, 2020.

Covenant compliance

The Company's credit facilities have a number of covenants and restrictions that, among other things, require the Company to maintain specified financial ratios and satisfy certain financial condition tests.

The covenants also limit the Company’s ability to incur additional debt, make intercompany loans, pay dividends and make other types of distributions, make certain acquisitions, repurchase the Company’s stock, create liens, cancel debt owed to the Company, enter into agreements with affiliates, modify the nature of the Company’s business, enter into sale-leaseback transactions, make certain investments, transfer and sell assets, cancel or terminate any material contracts and merge or consolidate.

As of May 31, 2021, the Company was in compliance with all material covenants for the above arrangements.

The total interest expense and finance charges for the Company's borrowings were $ 27,393 and $ 75,259 , respectively, for the three and nine months ended August 31, 2021, and $ 30,950 and $ 104,182 , respectively for the three and nine months ended August 31, 2020.

The variable interest rates ranged between 0.79 % and 4.46 % during the three months ended August 31, 2021, and between 0.77 % and 4.46 % during the nine months ended August 31, 2021.

During the three months ended August 31, 2020, the variable interest rates ranged between 0.74 % and 4.95 %, and between 0.74 % and 8.41 % during the nine months ended August 31, 2020.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and six months ended May 31, 2021 and 2020

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

Covenant compliance

As of August 31, 2021, the Company was in compliance with all material covenants for the above arrangements.

NOTE 10—EARNINGS PER COMMON SHARE:

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Three Months Ended

Six Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

Basic earnings per common share:

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Discontinued operations

Total basic net earnings per share

Total diluted net earnings per share

Anti-dilutive shares excluded from diluted earnings per share calculation

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Income available to participating securities was immaterial in all periods presented .

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

NOTE 11—GEOGRAPHIC INFORMATION:

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Three Months Ended

Six Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

United States

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and six months ended May 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

August 31, 2021

November 30, 2020

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The Company has a business relationship with MiTAC Holdings Corporation (“MiTAC Holdings”), a publicly-traded company in Taiwan, which began in 1992 when MiTAC Holdings became the Company's primary investor through its affiliates.

As of both May 31, 2021 and November 30, 2020, MiTAC Holdings and its affiliates beneficially owned approximately 18 % of the Company’s outstanding common stock.

As of both August 31, 2021 and November 30, 2020, MiTAC Holdings and its affiliates beneficially owned approximately 18 % of the Company’s outstanding common stock.

Matthew Miau, Chairman Emeritus of the Company’s Board of Directors and a director, is the Chairman of MiTAC Holdings and a director or officer of MiTAC Holdings’ affiliates.

Beneficial ownership of the Company’s common stock by MiTAC Holdings

As noted above, MiTAC Holdings and its affiliates in the aggregate beneficially owned approximately 18% of the Company’s outstanding common stock as of May 31, 2021.

As noted above, MiTAC Holdings and its affiliates in the aggregate beneficially owned approximately 18% of the Company’s outstanding common stock as of August 31, 2021.

These shares are owned by the following entities:

As of May 31, 2021

As of August 31, 2021

MiTAC Holdings ( 1)

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Three Months Ended

Six Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

Purchases of inventories and services

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for use of facilities of MiTAC Holdings and affiliates, net

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

The following table presents the Company’s receivable from and payable to MiTAC Holdings and its affiliates for the periods presented:

August 31, 2021

November 30, 2020

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Miau’s compensation is approved by the Nominating and Corporate Governance Committee, which is also composed solely of independent directors.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and six months ended May 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

Synnex Technology International is a publicly-traded corporation in Taiwan that currently provides distribution and fulfillment services to various markets in Asia and Australia, and is also a potential competitor of the Company.

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Employees in certain international subsidiaries of the Company are covered by government-mandated defined contribution plans.

During the three and six months ended May 31, 2021, the Company contributed $ 1,529 and $ 2,564 , respectively, to defined contribution plans.

During the three and six months ended May 31, 2020, the Company contributed $ 1,250 and $ 2,216 , respectively, to defined contribution plans.

During the three and nine months ended August 31, 2021, the Company contributed $ 1,178 and $ 3,742 , respectively, to defined contribution plans.

During the three and nine months ended August 31, 2020, the Company contributed $ 960 and $ 3,176 , respectively, to defined contribution plans.

The Company has a deferred compensation plan for certain directors and officers.

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The Company may invest balances in the plan in trading securities reported on recognized exchanges.

As of May 31, 2021 and November 30, 2020, the deferred compensation liability balance was $ 4,698 and $ 4,628 , respectively .

As of August 31, 2021, and November 30, 2020, the deferred compensation liability balance was $ 4,733 and $ 4,628 , respectively .

Defined Benefit Plans

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In June 2020, the Board of Directors authorized a three-year $ 400,000 share repurchase program, effective July 1, 2020, pursuant to which the Company may repurchase its outstanding common stock from time to time in the open market or through privately negotiated transactions.

As of May 31, 2021, the Company had no t repurchased any shares under this program.

On June 24, 2021 , the Company announced a cash dividend of $ 0.20 per share payable on July 30, 2021 to stockholders of record as of July 16, 2021 .

As of August 31, 2021, the Company had not repurchased any shares under this program.

On September 28, 2021 , the Company announced that its Board of Directors declared a quarterly cash dividend of $ 0.20 per common share payable on October 29, 2021 to stockholders of record as of the close of business on October 15, 2021 .

Future dividends are subject to continued capital availability, compliance with the covenants and conditions in some of the Company's credit facilities and declaration by the Board of Directors in the best interest of the Company’s stockholders.

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The Company’s finance leases are not material.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

The following table presents the various components of lease costs.

Three Months Ended

Six Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

Operating lease cost

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Total operating lease cost

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and six months ended May 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

The following table presents a maturity analysis of expected undiscounted cash flows for operating leases on an annual basis for the next five years and thereafter as of May 31, 2021:

As of August 31, 2021, the Company had $ 9,610 of future payments under additional leases, primarily for corporate facilities that had not yet commenced.

These leases will commence in 2021, with lease terms ranging from 3 to 5 years.

The following table presents a maturity analysis of expected undiscounted cash flows for operating leases on an annual basis for the next five years and thereafter as of August 31, 2021:

Fiscal Years Ending November 30,

2021 (remaining six months)

2021 (remaining three months)

Total payments

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Balance sheet location

August 31, 2021

November 30, 2020

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Other long-term liabilities

The following table presents s upplemental cash flow information related to the Company's operating leases for the six months ended May 31, 2021 and May 31, 2020.

The following table presents s upplemental cash flow information related to the Company's operating leases for the nine months ended August 31, 2021, and 2020.

Cash payments related to variable lease costs and short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below :

Six months ended

Nine months ended

Cash flow information

August 31, 2021

August 31, 2020

Cash paid for amounts included in the measurement of lease liabilities

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The weighted-average remaining lease term and discount rate were as follows:

Six months ended

Nine months ended

Operating lease term and discount rate

August 31, 2021

August 31, 2020

Weighted-average remaining lease term (years)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and six months ended May 31, 2021 and 2020

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

NOTE 16—COMMITMENTS AND CONTINGENCIES:

The Company was contingently liable as of May 31, 2021 under agreements to repurchase repossessed inventory acquired by flooring companies as a result of default on floor plan financing arrangements by the Company's customers.

The Company was contingently liable as of August 31, 2021 under agreements to repurchase repossessed inventory acquired by flooring companies as a result of default on floor plan financing arrangements by the Company's customers.

These arrangements are described in Note 8 - Accounts Receivable Arrangements and do not have expiration dates.

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Losses, if any, would be the difference between the repossession cost and the resale value of the inventory.

There have been no repurchases through May 31, 2021 under these agreements and the Company is not aware of any pending customer defaults or repossession obligations.

There have been no repurchases through August 31, 2021 under these agreements and the Company is not aware of any pending customer defaults or repossession obligations.

The Company believes that, based on historical experience, the likelihood of a material loss pursuant to these inventory repurchase obligations is remote.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and six months ended May 31, 2021 and 2020

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

NOTE 17—PENDING MERGER:

On March 22, 2021, the Company announced that it had entered into an agreement and plan of merger (the “Merger Agreement”) to acquire 100 % of the parent company of Tech Data Corporation, a Delaware Corporation ("Tech Data") in a cash and stock transaction (the "Merger").

The consideration payable to the stockholder that owns Tech Data in connection with the Merger (the “Merger Consideration”) consists of $ 1.61 billion in cash and 44 million shares of common stock of SYNNEX.

Following the proposed Merger, the sole stockholder of Tech Data will own approximately 45.9 % of SYNNEX common stock on a fully diluted basis, based on the Company’s shares outstanding as of May 31, 2021.

If the Merger is not consummated, then under certain circumstances the Company would be obligated to pay Tech Data a termination fee ranging from approximately $ 41 million to $ 132 million.

The Merger is expected to create a global IT distribution leader with significant breadth and depth of product offerings, services and logistic capabilities.

For the twelve months ended January 31, 2021, Tech Data generated $ 36.37 billion in revenue and approximately $ 21 million of net income.

The Company and Tech Data filed their respective notification and report forms under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 with respect to the Merger with the Federal Trade Commission and Department of Justice.

The waiting period for filings made by both SYNNEX and Tech Data expired on June 4, 2021.

On June 30, 2021, the Company received stockholder approval for the issuance of shares of SYNNEX common stock in connection with the initial merger contemplated by the Merger Agreement.

Certain foreign regulatory approvals are pending.

The Company expects the transaction to close in the second half of the calendar year 2021.

As discussed in Note 9 – Borrowings, the Company has secured financing arrangements to finance the Merger.

Additionally, prior to the completion of the proposed merger, the Company's ability to issue dividends outside its normal practice or repurchase shares of common stock is limited.

NOTE 17—SUBSEQUENT EVENT:

On September 1, 2021, pursuant to the terms of the Merger Agreement, SYNNEX acquired all the outstanding shares of common stock of Tiger Parent (AP) Corporation, the parent company of Tech Data, for consideration of $ 1.61 billion in cash and 44 million shares of common stock of SYNNEX, valued at approximately $ 5,614,400 .

The combined company is referred to as TD SYNNEX.

The Merger is expected to create a leading global distributor and solutions aggregator for the IT ecosystem.

Following the Merger, the stockholders of Tiger Parent (AP) Corporation own approximately 46 % of SYNNEX common stock on a fully diluted basis, based on the Company’s shares outstanding as of August 31, 2021.

Given the short period of time from the close of the acquisition to the filing of this Form 10-Q, the Company is in the process of compiling the initial accounting for the Merger, including the determination of the fair values of tangible assets acquired and liabilities assumed, the valuation of intangible assets acquired, income and non-income based taxes, residual goodwill and the amount of goodwill that will be deductible for tax purposes.

In connection with the closing of the Merger, SYNNEX repaid in full all amounts outstanding and terminated all outstanding commitments under the U.S.

Credit Agreement, of which a principal amount of $ 500 million of term loans were outstanding on the date of repayment and termination, and the U.S.

Term Loan Credit Agreement, of which a principal amount of $ 1.0 billion of term loans were outstanding on the date of repayment and termination.

Indebtedness outstanding at the closing of the Merger under Tech Data’s Asset-Based Credit Agreement was also repaid in full and the agreement was terminated.

SYNNEX used the net proceeds from the Notes Offering, together with borrowings made under the New Credit Agreement, and cash on hand at SYNNEX and Tiger Parent (AP) Corporation, to fund the cash consideration for the Merger and repay existing borrowings.

Additionally, on October 1, 2021, approximately $ 66 million outstanding aggregate principal amount of Tech Data’s 3.70 % Senior Notes due in 2022 and approximately $ 131 million outstanding aggregate principal amount of Tech Data’s 4.95 % Senior Notes due in 2027 were redeemed in full.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements