Hunter becomes the hunted as private equity giant makes $5bn bid to buy Tech Data – report

Private equity monster Apollo Global Management has reportedly made an approach to buy Tech Data, one of the world's largest tech distributors, with a bid believed to be almost $5bn.

According to Reuters, Apollo has offered $130 per share in cash, representing a nice little premium on Tech Data's stock price, which closed at $111.34 at the end of trading on Tuesday.

There is no guarantee that a deal will be done, an unnamed sourced familiar with the approach told the newswire. El Reg has asked Tech Data and Apollo to comment.

NASDAQ-listed Tech Data sells kit, software and services including cloud brokerage and billing. It has a particularly strong base with smaller resellers that often act as IT department for SMEs customers.

Investors are already looking at the company with positive sentiments as its share price already stands at a 33-year record high, but Apollo obviously feels there is room for it to rise further.

Consolidation in distribution isn't new, but Tech Data has historically been one of the company's doing the buying, having taken over Avnet Technology Solutions and SDG to name but a couple in recent years.

Apollo is understood to have made advances to Ingram Micro in 2016, dangling up to $7.5bn, but was turned down by Chinese owner HNA.

In Tech Data's fiscal '19 ended 31 January, revenues went up 11 per cent year-on-year to $37.239bn, and it made a net profit of $116.8m, boosted by the addition of Avnet TS.

In the first half of the current financial year, the distributor has reported sales of $17.498bn, flat with the year-ago period. Net profit, however, was up 23 per cent to $134.7m, as some cost reductions started to take affect. ®