Rich Hume took over as CEO of Tech Data last year. He wasn’t expecting to oversee the sale of the publicly traded IT distribution company less than 18 months later. But, he said Wednesday, when you get a good offer, you have to weigh it out.
In this case, $5.4 billion made a lot of sense for Tech Data’s shareholders, vendors, customers and colleagues, he said a few hours after announcing the deal with Apollo Growth Management, a massive New York private equity firm.
Hume, 60, who will stay on as CEO, said Apollo approached him earlier this year and talks heated up in the last month. His team has a lot of work to do before the sale is finalized next year, but he didn’t expect too many changes to the company’s culture or its substantial footprint in Pinellas County.
Here are excerpts from his interview with the Tampa Bay Times, edited for length and clarity:
What do you think Apollo’s leadership team saw in Tech Data that led them to want to spend $5.4 billion?
I say this humbly, but I believe that Apollo recognized that we are the premier and leading IT distribution firm within the industry. They see a team at Tech Data that is second to none. So it's our colleagues, our capabilities and our track record of success that I believe they found attractive.
Did you have any reservations about the sale? Did you ever wake up in the middle of the night and say, “We can’t do this!”?
I have no reservations. I do wake up in the middle of the night to make sure that any opportunity makes sense for all of our shareholders, our colleagues, our vendors and our customers. I can confidently tell you that there is a positive impact for all of them for this proposed deal.
Why do you think that?
Apollo has over $320 billion in assets under management today. They are wide and they are broad. I think that the broadness of their portfolio, as well as their experience within tech, is quite appealing. They have the opportunity to make investments to allow us to prosper moving forward.
How are Tech Data’s employees reacting to the news?
Very well. I think that this is a moment for all Tech Data colleagues to reflect on the house that they built, and then feel really proud and good about that. It’s a great acknowledgment to see that our company is valued so highly.
Tech Data has about 2,000 employees at its headquarters in Pinellas County. Will that number remain the same?
I think that we've got a lot of work to do and there's a lot of opportunity in front of us. So my expectation is the footprint will continue to be very stable.
Can you expand on that?
Because of the way the sales process works, Apollo has not shared top to bottom their investment thesis with me. What I can say is that they are a firm that relies upon existing management to run and manage the businesses in their portfolio.
This sale is much different than a competitive acquisition, where you bring two companies that do similar things together. In that case, they have to sort through management to determine what is the best alignment. In this instance, we have been acquired and will be a company within their portfolio. So it’s not like you’re pushing two companies together and you have some elimination. That’s not the case here. We will stand alone.
Tech Data has been a big player in terms of sponsorships and philanthropy. Do you expect that to change?
No. The beauty of the Apollo group is that they provide a level of autonomy and independence within each of the businesses that they own. Based on what we learned, we fully expect that we’ll be able to maintain our culture and our values. One of those core values is community service.
Will Tech Data still sponsor the St. Pete Pride Parade?
Yes, we fully intend to continue our growth around the areas of diversity and inclusion. It is part of our culture and will continue to be a significant part of our culture moving forward.
What happens next?
We need to abide by a big set of regulatory requirements. There is a shopping period, in which our bankers will go out and see if there’s any other interested buyers. Then there will be a shareholder vote based on the proposal from Apollo, and then we’ll potentially close the transaction and move forward from there.
Any final thoughts?
For Tech Data, it’s been a 45-year journey. There’s been an incredible company built here with a great culture and a great team. I think the market has acknowledged that fact through this offer. I absolutely know that the future moving forward is very bright and we look forward to the next chapter.