TD Synnex (SNX) has evolved from a traditional IT distributor into a global solutions aggregator by strategically acquiring companies like Westcon Group and Tiger Parent. 

This transformation allows it to integrate hardware and software from leading vendors into comprehensive IT solutions, addressing the growing demand for cloud computing and digital technologies. 

The shift has enhanced profitability through higher-margin offerings, positioning TD Synnex for long-term growth despite short-term revenue challenges.

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TD Synnex (SNX) was traditionally an IT distributor, playing the role of connecting original equipment manufacturers (OEMs) like HP, Dell, and Lenovo to corporate customers and resellers.

However, through a series of strategic acquisitions over the past decade, the company has transformed itself into a leading global solutions aggregator for the IT ecosystem.

As a distributor, TD Synnex’s core business involved distributing hardware from OEMs and selling it primarily to other companies and resellers. 

With the rise of cloud computing, software, and digital technologies, the market has shifted towards integrated solutions that combine both hardware and software.

Recognizing this trend, TD Synnex embarked on an acquisition strategy in the 2010s. Major acquisitions included Westcon Group in 2017, and Tiger Parent in 2021.

This transformed the company into a one-stop-shop solutions provider that could integrate different products from its vendor partners like Intel and Samsung into comprehensive technology solutions.

As a solutions aggregator, TD Synnex brings together the best technology vendors and uses its scale and expertise to integrate their products into optimized solutions.

This provides significant value to end customers by creating efficiently functioning IT ecosystems tailored to their needs. 

TD Synnex’s digital platforms and services also help partners deliver these integrated solutions faster.

The company’s transformation has paid dividends, with its Uniform return on assets ‘‘ROA’’ increasing thanks to the higher-margin solutions business.

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TD Synnex has also shifted its focus towards digital solutions, cloud computing, and related services—industries experiencing accelerated growth.

While some emphasize short-term factors like revenue declines, the company appears well-positioned for long-term success through its evolution into a global solutions aggregator.

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Joel Litman & Rob Spivey
Chief Investment Officer &
Director of Research
at Valens Research