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Tech Data shareholders approve $6 billion sale to Apollo Global Management

Private equity firm Apollo Global Management of New York first offered $130 a share, then raised its bid to $145 a share.
Shareholders voted Wednesday to sell Tech Data, which employs about 2,000 of its 14,000 employees in the Tampa Bay area, to Apollo Global Management for $6 billion, or $145 per share. DIRK SHADD  |  Times (2019)
Shareholders voted Wednesday to sell Tech Data, which employs about 2,000 of its 14,000 employees in the Tampa Bay area, to Apollo Global Management for $6 billion, or $145 per share. DIRK SHADD | Times (2019) [ DIRK SHADD | Tampa Bay Times ]
Published Feb. 12, 2020
Updated Feb. 12, 2020

LARGO — Tech Data shareholders on Wednesday voted to sell the company to Apollo Global Management for $6 billion.

“When do we get the money?” stockholder Phyllis Minton asked at the close of the meeting. The answer is not right away, as the merger is expected to close in the first half of this year.

Minton, 78, a retired nurse from St. Petersburg, made her first trip to the company’s offices on Wednesday out of curiosity, and was one of three individual shareholders who attended the meeting where votes representing nearly 29 million shares were counted. She has held Tech Data stock since the company went public, liked owning shares of a business “close to home” and would have preferred not to sell, but said Apollo’s offer of $145 per share was fair.

“I didn’t pay that much for it,” she said.

Apollo, a $325 billion private equity firm based in New York, originally offered $130 a share last November, for a total purchase price of $5.4 billion.

During a “go-shop” period, Tech Data, a global technology distributor for companies like Apple and Cisco, reached out to 60 companies in search of a better deal. The best competing offer, $140 a share, came from Berkshire Hathaway, the giant investment and holding company run by Omaha billionaire Warren Buffett. But Buffett dropped out of the bidding after Apollo raised its offer to $145 a share, setting the stage for Wednesday’s vote.

Related: Competing bid drives price for Tech Data to $6 billion

Along the way, Tech Data has faced five lawsuits challenging the deal: one that sought class-action status and four brought by individual shareholders.

First Tech Data shareholder Dean Drulias sued to block the sale in Hillsborough Circuit Court.

On Christmas Eve, Joseph Post filed a suit seeking class-action status in federal court in Delaware.

In January, three shareholders — Robert Franks Jr., Chana Laufer and Benjamin D. St. Germain — filed separate but similar suits challenging the sale in federal court for the southern district of New York.

In mid-January, Tech Data also received a letter on behalf of an alleged shareholder, Steven Makowsky, that claimed that the company has omitted or misstated facts in the proxy statement about the deal that it sent to shareholders.

In a more recent proxy statement, Tech Data said it believes all the legal claims “are without merit” and that it “specifically denies all allegations in the litigation.”

But, it added, to put the matter to rest and to avoid the risk of the litigation delaying or interfering with the merger, the company did make eight revisions to its account of how the deal came together.

Related: Chronology of the Tech Data-Apollo deal

One change adds the date — April 3, 2018 — when Tech Data’s board was first informed of Apollo’s interest. Another outlines how the board created a transaction committee to supervise the potential sale without having to get input from the full board on day-to-day decision-making. And a third states plainly that Tech Data CEO Rich Hume is expected to stay on in that role after the merger goes through.

As a result of those disclosures, the company said, all five plaintiffs agreed to dismiss their individual claims about the merger. The cases filed by Drulias and Post were withdrawn last week, according to court records. The others are still pending.

With $37 billion a year in revenues, Tech Data is No. 88 on the Fortune 500 list of largest publicly traded U.S. companies and is the second largest public company by revenue in Florida, just behind World Fuel Services of Miami and just ahead of Publix. The company has more than 14,000 employees worldwide, 2,000 of them at its headquarters near St. Petersburg-Clearwater International Airport. Its stock closed Tuesday at $144 a share.