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Apollo Global Management Closes Tech Data Acquisition

martinwolf Transaction Analysis
 
Apollo Global Management Closes Tech Data Acquisition
*Financial Information
  • Enterprise Value:    $5.9 Billion
  • EV/REV:                 0.16x
  • EV/EBITDA:           7.6x
Transaction Facts
  • Private equity firm Apollo Global Management (NYSE: APO) announced today that it completed its acquisition of Tech Data (NASDAQ: TECD)
  • The transaction was originally announced in November at $130 per share but was quickly revised upward to $145 per share after Tech Data received competing offers from unspecified bidders (later reported to include Berkshire Hathaway at $140 per share).
  • In the transaction announcement, Apollo also announced plans to invest approximately $750 million in “Digital Transformation Initiatives” to better serve channel partners through new technology and broader services capabilities
  • Tech Data shares had their final trade at $144.90, while Apollo shares closed today up over 4 percent.
martinwolf Analysis
  • Closing the Book: Today is approximately eight months after news of the transaction first appeared in Reuters, during vastly different economic circumstances. But this deal has been in the works for longer than that: a regulatory filing in December revealed Apollo first approached Tech Data’s then-CEO Bob Dutkowsky in March 2018.
  • Brave New World: Tech Data’s share price was relatively static at the offer price until March, but it dropped significantly with the broader market to $100 per share as COVID-19 hit financial markets. By April, however, it clawed its way back up to $130 per share and slowly recovered as the company continued to make progress on regulatory and diligence approvals.
  • A Sign of Things to Come?: The global pandemic has dramatically affected the M&A landscape, with YTD deals significantly lower than they were in 2019. However, while sectors like retail and aviation continue to see dramatically reduced activity, IT companies remain compelling targets — especially as they are able to facilitate industries’ broader shifts to remote and cloud-centric work.
  • Passing of the Torch: Tech Data was founded in 1974 by Edward Raymund, but it was under his son Steve that the company catapulted into its current form. The two were real pioneers that created great value for shareholders –setting the stage for the business’s next incarnation beginning today.
For more information about this transaction, click here to read the press release.
*Financial information from Factset.
martinwolf was not the advisor in this transaction.
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