Acquisition, Integration and Restructuring Costs

9 Months Ended

Aug. 31, 2023

Restructuring and Related Activities [Abstract]

ACQUISITION, INTEGRATION AND RESTRUCTURING COSTS

ACQUISITION, INTEGRATION AND RESTRUCTURING COSTS:

Acquisition, integration and restructuring costs are primarily comprised of costs related to the Merger and costs related to the Global Business Optimization 2 Program initiated by Tech Data prior to the Merger (the “GBO 2 Program”).

The Merger

The Company incurred acquisition, integration and restructuring costs related to the completion of the Merger, including professional services costs, personnel and other costs, long-lived assets charges and termination fees, and stock-based compensation expense. Professional services costs are primarily comprised of IT and other consulting services, as well as legal expenses. Personnel and other costs are primarily comprised of costs related to retention and other bonuses, severance and duplicative labor costs. Long-lived assets charges and termination fees include accelerated depreciation and amortization expense of $4.7 million and $16.2 million recorded during the three and nine months ended August 31, 2023, respectively and $4.4 million and $57.3 million recorded during the three and nine months ended August 31, 2022, respectively due to changes in asset useful lives in conjunction with the consolidation of certain IT systems. Long-lived asset charges and termination fees also include $0.4 million and $12.9 million recorded during the three and nine months ended August 31, 2023, respectively for termination fees related to certain IT systems, along with $4.3 million recorded during the three and nine months ended August 31, 2022 for impairment charges. Stock-based compensation expense primarily relates to costs associated with the conversion of certain Tech Data performance-based equity awards issued prior to the Merger into restricted shares of TD SYNNEX (refer to Note 4 - Share-Based Compensation for further information) and expenses for certain restricted stock awards issued in conjunction with the Merger.

In July 2023, the Company offered a voluntary severance program ("VSP") to certain co-workers in the United States as part of the Company's cost optimization efforts related to the Merger. The Company incurred $37.2 million of costs in connection with the VSP during the three and nine months ended August 31, 2023, including $30.0 million of severance costs and $7.2 million of duplicative labor costs.

During the three and nine months ended August 31, 2023 and 2022, acquisition and integration expenses related to the Merger were composed of the following:


	Three Months Ended				Nine Months Ended
	August 31, 2023		August 31, 2022		August 31, 2023		August 31, 2022
Professional services costs	$	5,036	$	6,514	$	16,157	$	20,455
Personnel and other costs	9,430		11,699		33,712		27,047
Long-lived assets charges and termination fees	5,078		8,693		29,067		61,564
Stock-based compensation	11,912		12,911		34,472		39,376
Voluntary severance program costs	37,178		—		37,178		—
Total	$	68,634	$	39,817	$	150,586	$	148,442

GBO 2 Program

Prior to the Merger, Tech Data implemented its GBO 2 Program that includes investments to optimize and standardize processes and apply data and analytics to be more agile in a rapidly evolving environment, increasing productivity, profitability and optimizing net-working capital. TD SYNNEX continued this program in conjunction with the Company’s integration activities. Acquisition, integration and restructuring expenses related to the GBO 2 Program are primarily comprised of restructuring costs and other costs. Restructuring costs are comprised of severance costs and other associated exit costs, including certain consulting costs. Other costs are primarily comprised of personnel costs, facilities costs and certain professional services fees not related to restructuring activities.

The Company incurred acquisition, integration and restructuring costs under the GBO 2 Program of $3.0 million and $9.0 million during the three and nine months ended August 31, 2023, respectively, and $6.6 million and $23.8 million during the three and nine months ended August 31, 2022, respectively. The Company does not expect to incur material costs under the GBO 2 Program in future periods. Cash payments related to restructuring costs and accrued restructuring balances related to the GBO 2 Program are not material as of August 31, 2023.