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Tech Data (TECD) Appoints CEO Dutkowsky as the Chairman

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Tech Data Corporation has named Robert M. Dutkowsky as the new chairman of the company. Dutkowsky, who is currently the CEO of the company, will assume his additional responsibilities after the current chairman, Steve Raymund, retires on Jun 7, 2017.

Raymund is the son of Tech Data founder Edward Raymund and has been a part of the company since 1981. He was appointed the board’s chairman in 1991. Reportedly, Raymund Sr. had sold his company to his son for a meager $10,000 in 1984. Tech Data has come a long way since then and currently has a market cap of $3.5 billion.

Per Charles Adair, lead independent director of the company, “the leadership transition was the culmination of a well-planned succession process that the board of directors has been working on for several years”. Dutkowsky emerged as a suitable choice as the company has seen tremendous growth under his leadership. He became the CEO in 2006.

Over the last few years, Tech Data has positioned itself well to achieve strong growth based on increasing demand for data center systems, cloud and mobility offerings. The company’s efforts to diversify into new domains are a positive. The higher level of spending in these areas is expected to drive revenue growth for Tech Data as the company consolidates its position in the fast-growing domain of data center, mobile technology, software and integrated supply chain.Tech Data’s diversified customer base in both North America and Europe is also a big positive.

With Dutkowsky at the helm, Tech Data successfully completed the purchase of the Technology Solutions business from Avnet for $2.6 billion. Following the completion of the acquisition, management targets cost savings of almost $50 million in the first year and $100 million in the second year.

All these developments have been well reflected in its share price movement. In the past one year, Tech Data gained 18.5% compared with the Zacks Retail Wholesale Computers industry’s gain of 16.8%.

Currently, Tech Data carries a Zacks Rank #1 (Strong Buy).

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