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November 13, 2019 
martin wolf Transaction Analysis
 
Tech Data To Be Acquired By Apollo Global Management 

*Financial Information
  • Enterprise Value:    $5.5 Billion
  • EV/REV:                 0.15x
  • EV/EBITDA:           7.1x
Transaction Facts
  • Private equity firm Apollo Global Management (NYSE: APO) entered into a definitive agreement to acquire Tech Data (NASDAQ: TECD) for $130 per share in cash, confirming earlier rumors we previously reported on Oct. 16.
  • Tech Data shares, already trading higher since the rumors, are now trading up approximately 5 percent at $131.28. Volume is almost 10x the 10-day daily average at 2.3 million.
  • Apollo shares are effectively unchanged at $42.85.
martin wolf  Analysis
  • Making it Official:  This transaction comes almost exactly one month since rumors first appeared in Reuters broadly outlining the proposed transaction. At the time, sources stated that there was "no certainty" any deal would occur -- though the press release gave no indication of timing, it cited "a process of consideration of Apollo's proposal."
  • Paying a Premium: The purchase price represents a premium of approximately 24.5 percent above Tech Data's 30-day volume weighted average closing share price ending Oct. 15, the day before rumors were published. It also captures Tech Data's share price bump from late August following better than expected earnings -- previously, the company had dipped below its year-opening price after several months of price fluctuations around the $100 per share mark.
  • What's Next?: This transaction is expected to close in the first half of 2020, following a "go-shop" period lasting until Dec. 9, 2019 and applicable waiting periods. It has been a strong year for the IT Supply Chain, with notable deals including BC Partners' acquisition of Presidio from Apollo. All eyes now shift back to RRJ Capital's rumored interest in Ingram Micro, which would likely represent a more than $4 billion transaction.
For more information about this transaction, click  here to read the press release.
 
*Financial information from Factset.

martin wolf  was not the advisor in this transaction.

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About martinwolf    


Headquartered in Scottsdale, Arizona with an office in New York, martinwolf is a leading M&A Advisory focused on middle market companies in the IT Services, IT Supply Chain, and Software space. Since 1997, our team has completed more than 160 transactions in over 20 countries and sold eight divisions of Fortune 500 companies. 

 

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