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Tech Data subject to $5bn takeover bid

(Image credit: Image source: Shutterstock/Kritchanut)

Private equity firm Apollo Global Management seems to be on the lookout for new acquisitions, and it allegedly set its sights on a giant among tech distributors – Tech Data.

According to media reports, Apollo Global Management has offered $130 per share in cash, slightly more than the market prices of $111.34. All things considered, this puts the bid at around $5 billion.

The deal is far from being wrapped up, it was said, so there is still a chance for everything to fall through. Both sides are currently quiet on the matter.

Tech Data is headquartered in Clearwater, Florida, and provides IT infrastructure to corporate resellers, marketers and retailers. According to Reuters, it has a market cap of $4 billion, $1.3 billion of debt and $738 million in cash.

It has lower operating margins compared to the competition, as it spends most of its funds investing in new technology and building new offerings. Two years ago, it bought Avnet’s tech business for $2.6bn.

Apollo, on the other hand, tried to buy Ingram Micro three years ago, waving a tempting offer of $7.5bn, but Ingram Micro’s owner, the Chinese-based HNA, turned the offer down.

Tech Data’s fiscal 2019 has shown an 11 per cent rise in revenue, compared to the year before, hitting $37.23bn. It made a net profit of $116.8 million.