Apollo Global Management is acquiring Tech Data for $5.4 billion, the private equity firm and technology distributor announced this morning. Rumors about the potential deal had been swirling in recent weeks, with earlier reports pegging Apollo's initial Tech Data bid at $5 billion.
Today's formal announcement comes roughly one year after Apollo attempted (but failed) to acquire Tech Data rival Ingram Micro from HNA Group. (For its part, Ingram also remains the topic of takeover rumors.)
Apollo Global Management has extensive private equity experience in and around the technology sector — particularly as it pertains to MSPs (managed IT services providers) and IT consulting firms. The firm has owned cloud MSP Rackspace since 2016, and has also backed Presidio in the midmarket IT solutions provider sector.
Apollo Acquiring Tech Data: Private Equity and Distribution Perspectives
In a prepared statement, Tech Data CEO Rich Hume said:
“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. 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.”
Added Matt Nord, co-lead partner of Apollo Private Equity:
“Through this investment, we are 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.”
Concluded Robert Kalsow-Ramos of Apollo Private Equity:
“We have tremendous respect for Tech Data’s talented management and colleagues around the globe and commend their success in establishing Tech Data as a leader at the center of the IT ecosystem. We are excited to work with the Tech Data team and continuing to invest in the company’s people and end-to-end portfolio.”
Apollo Acquiring Tech Data: Leadership and Variables
Hume will remain Tech Data's CEO, and the company will remain headquartered in Clearwater, Florida.
Still, this is not a done deal. The agreement includes a "go shop" provision, which permits Tech Data to pursue alternative bids through December 9, 2019. There's no guarantee that alternative or more lucrative offers for the distributor will surface, Tech Data noted.