Tech Data 2014 Annual Report Download - page 5

Table of Contents
PART I
Overview
Tech Data Corporation is one of the world’s largest wholesale distributors of technology products. We serve as an indispensable link in the
technology supply chain by bringing products from the world’s leading technology vendors to market, as well as providing our customers with
advanced logistics capabilities and value-added services. Our customers include approximately 115,000 value-added resellers (“VARs”), direct
marketers, retailers and corporate resellers who support the diverse technology needs of end users. We sell to customers in more than 100
countries throughout North America, South America, Europe, the Middle East and Africa. Throughout this document we will make reference to
the two primary geographic markets we serve as the Americas (including North America and South America) and Europe. For a discussion of
our geographic reporting segments, see Item 8, "Financial Statements and Supplementary Data.”
The Company’s financial objectives are to grow sales at or above the overall IT market growth rate by gaining share in select product areas,
grow earnings in local currency, generate positive cash flow, and earn a return on invested capital above our weighted average cost of capital. To
achieve this, we focus on a strategy of excellence in execution, diversification and innovation that we believe differentiates our business in the
marketplace.
Execution is fundamental to our business success. We have 28 logistics centers where each day, tens of millions of dollars of technology
products are received from vendors, picked and packed and shipped to our customers. Products are generally shipped from regionally located
logistics centers the same day the orders are received. In addition, execution is marked by a high level of service provided to our customers
through our company’s technical, sales and marketing support, electronic commerce tools, product integration services and financing programs.
Our diversification strategy seeks to continuously remix our product and customer portfolios towards higher growth and higher return market
segments through organic growth initiatives and acquisitions. We believe that as industry standardization, mobility, cloud computing, the
convergence of consumer and professional devices and other potentially disruptive factors transform the way technology is used and delivered,
we will leverage our highly efficient infrastructure to capture new market opportunities emerging in specialty areas, such as data center,
software, mobility and consumer electronics.
The final tenet of our strategy is innovation. Our IT systems and e-
business tools and programs have provided our business with the flexibility to
effectively navigate fluctuations in market conditions, structural changes in the technology industry, as well as changes created by products we
sell. These IT systems and e-business tools and programs have also worked to strengthen our vendor and customer relationships, while at the
same time improving the efficiency of these business partners.
We believe our strategy of execution, diversification and innovation will continue to strengthen our value proposition with vendor partners and
reseller customers while positioning us for continued market expansion and profitable growth.
History
Tech Data was incorporated in 1974 to market data processing supplies such as tapes, disk packs, and custom and stock tab forms for mini and
mainframe computers directly to end users. With the advent of microcomputer dealers, we made the transition to a wholesale distributor in 1984
by broadening our product line to include hardware products and withdrawing entirely from end-user sales.
From fiscal 1989 through fiscal 2007, we expanded geographically through the acquisitions of several distribution companies in both the
Americas and Europe, significantly strengthening our position in certain product and customer segments.
In fiscal 2008, we executed a joint venture agreement with Brightstar Corp. ("Brightstar"), one of the world’s largest wireless products
distributors and supply chain solutions providers. Brightstar Europe Limited ("BEL"), our consolidated joint venture with Brightstar, distributed
mobile phones and other wireless devices to a variety of customers including mobile operators, dealers, agents, retailers and e-tailers in certain
European markets. During the third quarter of fiscal 2013, we acquired Brightstar's fifty percent ownership interest in BEL. The terms of the
acquisition agreement included a payment of $165.9 million in cash for Brightstar's equity in BEL and the repayment of all loans advanced by
Brightstar to BEL. We funded the acquisition, repayment of the loans advanced by Brightstar and transaction costs with our available cash.
In fiscal 2011, we continued to support our diversification strategy by completing five acquisitions in Europe, including the acquisition of Triade
Holding B.V. (“Triade”), a privately-held portfolio of leading value-added distributors of consumer electronics and information technology
products in the Benelux region, Denmark and Norway. We believe the acquisition of Triade strengthened our presence in these geographies and
enabled us to accelerate our diversification strategy into the consumer electronics business in
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ITEM 1.
Business.