(Reuters) – Private equity Apollo Global Management (APO.N) will buy U.S. information technology equipment distributor Tech Data (TECD.O) in a deal valued at $5.4 billion, the companies said on Wednesday.
Excluding debt, the deal is valued at about $4.77 billion, according to Reuters calculations based on the number of outstanding shares as of July 31.
Reuters reported last month about the possible deal, citing sources.
Tech Data shareholders will receive $130 per share in cash, representing a premium of nearly 17% to the stock’s closing price on Oct. 15, the last trading day before the Reuters report.
Tech Data shares were last up 4.4% at $130.91 in premarket trading.
Tech Data said it will solicit alternative acquisition proposals from third-parties during a “go-shop” period until Dec. 9 as part of the deal agreement.
Rich Hume will continue to lead Tech Data as chief executive officer after the deal close, which is expected in the first half of 2020.
Based in Clearwater, Florida, Tech Data provides computers, mobile phones, printers, servers and other information technology infrastructure to corporate resellers, direct marketers and retailers. It had debt and cash on hand as of the end of July of $1.3 billion and $738 million, respectively.
Tech Data has lower operating margins than some of its peers, as it invests in expanding its offerings. Two years ago, it acquired Avnet Inc’s (AVT.O) technology solutions business for $2.6 billion.
The technology equipment distribution sector has attracted strong private equity interest in the last year. In January, buyout firm CVC Capital Partners acquired ConvergeOne Holdings Inc, a distributor of networking and collaboration products, for $1.8 billion.
Bank of America Securities is the financial adviser to Tech Data, and Cleary Gottlieb Steen & Hamilton LLP is its legal counsel.
Citi, J.P. Morgan and Wells Fargo are serving as financial advisers to Apollo and financing is being provided by Citi, J.P. Morgan, Wells Fargo, Barclays and RBC Capital Markets.
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Home » Analysis & Comment » Buyout firm Apollo Global to take Tech Data private in $5.4 billion deal
Buyout firm Apollo Global to take Tech Data private in $5.4 billion deal
(Reuters) – Private equity Apollo Global Management (APO.N) will buy U.S. information technology equipment distributor Tech Data (TECD.O) in a deal valued at $5.4 billion, the companies said on Wednesday.
Excluding debt, the deal is valued at about $4.77 billion, according to Reuters calculations based on the number of outstanding shares as of July 31.
Reuters reported last month about the possible deal, citing sources.
Tech Data shareholders will receive $130 per share in cash, representing a premium of nearly 17% to the stock’s closing price on Oct. 15, the last trading day before the Reuters report.
Tech Data shares were last up 4.4% at $130.91 in premarket trading.
Tech Data said it will solicit alternative acquisition proposals from third-parties during a “go-shop” period until Dec. 9 as part of the deal agreement.
Rich Hume will continue to lead Tech Data as chief executive officer after the deal close, which is expected in the first half of 2020.
Based in Clearwater, Florida, Tech Data provides computers, mobile phones, printers, servers and other information technology infrastructure to corporate resellers, direct marketers and retailers. It had debt and cash on hand as of the end of July of $1.3 billion and $738 million, respectively.
Tech Data has lower operating margins than some of its peers, as it invests in expanding its offerings. Two years ago, it acquired Avnet Inc’s (AVT.O) technology solutions business for $2.6 billion.
The technology equipment distribution sector has attracted strong private equity interest in the last year. In January, buyout firm CVC Capital Partners acquired ConvergeOne Holdings Inc, a distributor of networking and collaboration products, for $1.8 billion.
Bank of America Securities is the financial adviser to Tech Data, and Cleary Gottlieb Steen & Hamilton LLP is its legal counsel.
Citi, J.P. Morgan and Wells Fargo are serving as financial advisers to Apollo and financing is being provided by Citi, J.P. Morgan, Wells Fargo, Barclays and RBC Capital Markets.
Source: Read Full Article