Private equity firm Apollo Global Management has acquired IT distribution firm Tech Data for US$130 per share, effectively valuing the deal at US$5.4 billion.
Speculation of a buyout had been mounting for the past few weeks and the deal expected to close in the first half of calendar year 2020.
Tech Data CEO Rich Hume will continue to lead the company, which will remain at its Clearwater, Florida headquarters. Tech Data board of directors unanimously approved the transaction and recommend shareholders to vote in favour of the deal.
As a result of the buyout, Tech Data will become a privately held company.
“Over our 45-year history, Tech Data has grown to become one of the largest and most respected technology distributors in the world. This agreement reflects the significant progress we have made in our strategy of delivering higher value and positions us for continued growth and success,” Hume said.
“This investment by funds managed by one of the world’s leading global alternative investment managers will afford us additional resources to accelerate our ability to bring to market the technology products and solutions the world needs to connect, grow and advance.
"The transaction will enable us to build on our success, making Tech Data a growth platform and enabling us to further differentiate and expand our end-to-end solutions and provide our channel partners with unparalleled reach, efficiency and expertise.”
Tech Data lead independent director on the board, Charles Adair, said the deal followed a process of consideration of Apollo’s proposal by the Board that included review and discussion of strategic alternatives with the Board’s financial and legal advisors.
“The transaction delivers significant cash value to our shareholders and creates exciting opportunities for our colleagues, channel partners and other key constituents,” he added.
Apollo Private Equity co-lead partner, Matt Nord, said through this investment, it was committed to expanding Tech Data’s position as a trusted partner to the world's leading technology vendors while providing best-in-class customer service.
“As a private company with our sponsorship and a strong balance sheet, Tech Data will have significant financial and strategic flexibility to drive growth going forward,” he said.
Transaction financing is being provided by Citi, J.P. Morgan, Wells Fargo, Barclays and RBC Capital Markets.