Apollo Global Management, LLC APO recently entered into an agreement to acquire Tech Data TECD for $5.4 billion, or $130 per share. The aggregate value of the deal represents a premium of 24.5%, based on the average closing price of a month’s period ending Oct 15.
Portion of the transaction will be financed through debt, provided by Citigroup, JPMorgan JPM, Wells Fargo WFC, Barclays PLC and RBC Capital Markets. The deal approved by Tech Data’s board of directors, is expected to close in the first half of 2020. However, it is subject to customary closing conditions (including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act), foreign regulatory approvals and majority approval by the Tech Data shareholders.
Per the terms of the deal, Tech Data will have a go-shop period, until Dec 9, 2019, during which the company can look for alternative acquisition proposals from third parties.
Matt Nord, co-lead partner of Apollo Private Equity, noted, “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.”
Post the deal’s closure, Tech Data will become a private company, with its headquarters at Clearwater, FL. Also, Rich Hume will continue to be Tech Data CEO.
Apollo Global, one of the leading global alternative investment managers had a balance of asset under management of $322.7 billion as of Sep 30, 2019. The company is aimed at boosting its performance on the back of strategic initiatives, including acquisitions.
In March, Apollo Global clinched a deal to acquire Direct ChassisLink, Inc. and Blume Global, Inc. from EQT Infrastructure. Prior to this, it had announced a deal to acquire 13 local television stations and three radio stations from Cox Enterprises.
Also, shares of the company have surged 75.9% so far this year, significantly outperforming 9% growth recorded by the industry.
Currently, Apollo Global carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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