$5.4bn sale of Tech Data completes

Distribution behemoth completes sale to private equity and announces $750m investment plan

Tech Data has closed its sale to private equity firm Apollo Global Management for $5.4bn.

The deal, which was first announced in November last year, gives Tech Data an enterprise value of $6bn and will see Apollo make a $3.75bn equity investment in the distributor.

All outstanding shares in Tech Data common stock will be acquired by affiliate funds managed by Apollo, with existing shareholders set to receive $145 in cash for each share.

Tech Data CEO Rich Hume will continue to lead the distributor from its Clearwater, Florida headquarters.

"We are excited to enter Tech Data's next chapter as a private company with our new sponsors at Apollo who have a track record of building great businesses in our sector," said Hume.

"Having a single, strategic equity owner that's fully aligned with our mission we believe gives us a real advantage in accelerating our transformational strategy and allows us to think more creatively - without the short-term demands that can come with public ownership."

In a statement, Apollo said that it sees "significant opportunities for expansion" in Tech Data.

"Tech Data is a global, market-leading company with an excellent management team and significant opportunities for expansion," said Matt Nord, co-lead partner of private equity at Apollo.

"As a result of this acquisition and the resources we can bring to bear, Rich and the Tech Data team will have the strategic and financial flexibility to invest in new technology, expand services and pursue transactions that we believe will drive long-term value creation."

On closing the deal, Tech Data also announced plans to invest $750m in digital transformation initiatives over the next five years, which it claims will enable it to better serve its channel partners.

These will include investments to expand its StreamOne Cloud Platform as well as fund plans to "optimise and standardise" processes and apply data and analytics to help it become more agile.

Tech Data's deal with Apollo was confirmed in November last year after rumours emerged a month earlier of a potential union.

At the time, Hume said selling up to Apollo will allow Tech Data to accelerate its go-to-market strategy and provide "unparalleled" reach, efficiency and expertise to its channel partners.

Tech Data and Apollo predicted the transaction to close in the first half of 2020. The transaction looked to be delayed around a month ago, however, after Australian regulators held up the deal.

Apollo was reportedly looking into a $7.5bn bid for rival player Ingram Micro a year before its deal with Tech Data was announced.

Through its deal with Apollo, Tech Data claims that its strong balance sheet makes it one of the world's highest credit quality, lowest levered sponsor-backed companies.