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Competing bid drives price for Tech Data to $6 billion

Private equity firm Apollo Global Management has raised its offering price from $130 to $145 per share after another firm made a better offer to buy Tech Data.
Apollo Global Management has raised its bid for Tech Data, based in Largo, from $5.4 billion to $6 billion. [DIRK SHADD  |  Tampa Bay Times]
Apollo Global Management has raised its bid for Tech Data, based in Largo, from $5.4 billion to $6 billion. [DIRK SHADD | Tampa Bay Times]
Published Nov. 28, 2019
Updated Nov. 28, 2019

LARGO — The price to buy Tech Data has risen from $5.4 billion to $6 billion.

The change comes after another bidder topped the $130-per-share offered by private equity firm Apollo Global Management. Under terms of its sales agreement with Apollo, Tech Data has until Dec. 9 to entertain other offers.

In response, Apollo raised its offer to $145 per share, and Tech Data accepted its amended offer.

RELATED: Private equity giant to buy Tech Data for $5.4 billion

News of a second offer does not exactly come as a surprise. Analyst Keith Housum, who follows Tech Data for Northcoast Research, said recently that Apollo’s initial offer of $130 per share was low enough that “it might attract a rival.”

Tech Data announced the new offer and Apollo’s counter-offer Wednesday night. Its stock closed Wednesday at $129 per share, but spiked to nearly $143 per share in after-hours trading following the announcement.

Apollo’s new offer is 11.5 percent more than its original offer and is 30 percent more than the price of Tech Data’s stock before news of Apollo’s bid broke in mid October.

Tech Data said it received the competing offer Saturday. On Sunday, its board of directors unanimously determined that the new offer was superior to Apollo’s bid. Tech Data did not identify the second bidder or say what the terms of its offer were.

Apollo raised its bid Wednesday. Tech Data’s board determined that the competing offer was no longer better and unanimously agreed to Apollo’s new terms. It also recommended that shareholders vote for the sale, which is expected to close in the first half of 2020.

If the deal with Apollo goes through, Tech Data is expected to remain headquartered in Largo, where it was founded in 1974 to sell computer tapes, disk packs and other supplies for mini and mainframe computers directly to users.

Since then, it has grown into one of the Tampa Bay area’s largest companies and is the No. 88 company on the Fortune 500 list of largest publicly traded companies. It has more than 14,000 employees worldwide, 2,000 of them at its headquarters near St. Petersburg-Clearwater International Airport.

Tech Data buys a wide range of servers, computers, printers, phones, cameras, tablets, copiers, scanners, software, cloud services and more from manufacturers like Apple, Cisco Systems and HP. It sells those products and provides service and support to clients in more than 100 countries through a network of 11 logistics centers, six of them in the United States.

Sales in Europe account for 51 percent of Tech Data’s business. Europe, North and South America make up 46 percent of its sales. The Asia-Pacific market accounts for 3 percent.

Tech Data at a glance

Headquarters: Largo. Prospective buyer Apollo Global Management has said the company will remain headquartered in Pinellas County.

Founded: 1974.

The business: Buys tech products from Apple, Cisco Systems, HP and others, then sells the equipment and provides service to clients in 100 countries.

CEO: Rich Hume, a former IBM executive who was Tech Data’s chief operating officer before taking over as CEO in June 2018. He is expected to stay on as CEO if shareholders approve the sale.

Revenue last year: $32.7 billion, second-largest among public companies in Florida. More than 125,000 customers.

Stock market value: $4.57 billion.

Employees: 14,000-plus worldwide, 2,000 in Pinellas County.

Fortune 500 rank: 88th.

Known for: Community involvement; advocacy for LGBTQ rights.

Apollo Global Management at a glance

Headquarters: New York. 1,300 employees. Offices in Los Angeles, San Diego, Houston, Bethesda, Md., London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong, Shanghai and Tokyo.

Founded: 1990.

The business: Apollo manages capital for hundreds of investors in dozens of countries, including pension funds, sovereign wealth funds, financial institutions, wealthy individuals, university endowments and charitable foundations. Sixty-three percent of its investors are in the United States, with 14 percent in Europe, 13 percent in Asia and Australia, 8 percent in the Middle East and 1 percent in Latin America.

Assets: $325 billion, with assets that include well-known companies such as Chuck E. Cheese, Norwegian Cruise Lines, the Fresh Market and ADT home security.

Annual revenue: $1.9 billion.

CEO: Leon Black, who is also the firm’s founder and chairman. Former managing director at Drexel Burnham Lambert.


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