Funds Managed by Affiliates of Apollo Complete Tech Data Acquisition

Rhea-AI Summary

Apollo Global Management has completed its acquisition of Tech Data Corporation, valued at approximately $6 billion. As part of this transition, Tech Data plans to invest $750 million in digital transformation initiatives over the next five years, enhancing its service capabilities and agility. With a $3.75 billion equity investment from Apollo, Tech Data is positioned as one of the lowest levered sponsor-backed companies, facilitating its strategic growth without the pressure of public ownership. Shareholders will receive $145 in cash per share following the acquisition.

Positive

• Tech Data plans to invest $750 million in digital transformation initiatives over the next five years.
• Acquisition positions Tech Data with significant financial flexibility at approximately 2.5x leverage.
• Strategic equity ownership by Apollo allows for long-term planning and growth without public market pressures.

Negative

• None.

Tech Data Plans to Invest Approximately $750 Million in Digital Transformation Initiatives to Improve Channel Partner Experience

Strong Pro Forma Balance Sheet Gives Significant Financial Flexibility, Makes Tech Data One of the Lowest Levered Sponsor-Backed Companies

NEW YORK, June 30, 2020 (GLOBE NEWSWIRE) -- An affiliate of certain funds managed by affiliates of Apollo Global Management, Inc. (NYSE: APO) (together with its consolidated subsidiaries, “Apollo”) today announced completion of its acquisition of Tech Data Corporation (Nasdaq: TECD) (“Tech Data”), one of the world’s largest technology distributors. Chief Executive Officer Rich Hume will continue to lead Tech Data from its headquarters in Clearwater, Florida.

“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.”

Tech Data CEO Rich Hume said, “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. 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.”

The transaction gives Tech Data an enterprise value of approximately $6 billion and included a $3.75 billion equity investment made by Apollo. With approximately 2.5x leverage, Tech Data is one of the highest credit quality, lowest levered sponsor-backed companies. As part of its go-forward plan, over the next five years Tech Data plans to invest approximately $750 million in digital transformation initiatives to better serve its channel partners. This includes investments in technology to expand its StreamOne Cloud Platform, optimize and standardize processes and apply data and analytics to be more agile in a rapidly evolving environment.

Apollo Private Equity Partner Robert Kalsow-Ramos added, “Tech Data benefits from exceptional global capabilities, a strong financial position and a values-driven corporate culture, all within an industry that continues to experience strong secular growth. We are excited to now leverage Apollo’s resources and experience to support the management team and take Tech Data to the next level of industry leadership and service to its customers, including thousands of small- and medium-sized businesses around the world. Today’s announcement of a $750 million investment in digital transformation is a testament of this focus and our commitment to Tech Data’s long-term growth.”

Pursuant to the terms of the merger agreement, an affiliate of certain funds managed by affiliates of Apollo acquired all of the outstanding shares of Tech Data common stock. Tech Data’s shareholders are entitled to receive $145 in cash for each share of TECD common stock owned. As a result of the completion of the merger, shares of Tech Data’s common stock no longer trade on the NASDAQ Global Select Market.

About Apollo
Apollo is a leading global alternative investment manager with offices in New York, Los Angeles, San Diego, Houston, Bethesda, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong, Shanghai and Tokyo. Apollo had assets under management of approximately $316 billion as of March 31, 2020 in credit, private equity and real assets funds invested across a core group of nine industries where Apollo has considerable knowledge and resources. For more information about Apollo, please visit www.apollo.com.

About Tech Data
Tech Data connects the world with the power of technology. Our end-to-end portfolio of products, services and solutions, highly specialized skills, and expertise in next-generation technologies enable channel partners to bring to market the products and solutions the world needs to connect, grow and advance. Tech Data is ranked No. 90 on the Fortune 500® and has been named one of Fortune’s World’s Most Admired Companies for 11 straight years. To find out more, visit www.techdata.com or follow us on Twitter, LinkedIn, Facebook and Instagram.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of applicable federal securities laws.  The forward-looking statements include, without limitation, statements concerning the performance of Tech Data.  Forward-looking statements involve risks and uncertainties, including but not limited to economic, competitive, and technological factors outside Apollo’s or Tech Data’s control that may cause actual results to differ materially from the forward-looking statements. You should not place undue reliance on forward-looking statements as a prediction of actual results.  Apollo and Tech Data expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in expectations or events, conditions or circumstances on which any such statements are based.

Apollo Contact Information
For investors please contact:
Gary M. Stein
Head of Investor Relations
Apollo Global Management, Inc.
(212) 822-0467
gstein@apollo.com

Ann Dai
Investor Relations Manager
Apollo Global Management, Inc.
(212) 822-0678
adai@apollo.com

For media inquiries please contact:
Joanna Rose
Global Head of Corporate Communications
Apollo Global Management, Inc.
(212) 822-0491
jrose@apollo.com

Tech Data Contact Information
For investors please contact:
Arleen Quiñones
Corporate Vice President, Investor Relations & Corporate Communications
(727) 532-8866
arleen.quinones@techdata.com 

For media inquiries please contact:
Bobby Eagle
Director, External Communications
(727) 538-5864
bobby.eagle@techdata.com 

FAQ

What is the value of Apollo's acquisition of Tech Data?

The acquisition of Tech Data by Apollo Global Management is valued at approximately $6 billion.

What will Tech Data invest in after the acquisition?

Tech Data plans to invest $750 million in digital transformation initiatives over the next five years.

What financial condition does Tech Data hold post-acquisition?

Tech Data has a leverage ratio of approximately 2.5x, making it one of the lowest levered sponsor-backed companies.

How much will Tech Data shareholders receive from the acquisition?

Tech Data shareholders are entitled to receive $145 in cash for each share of common stock owned.

Who will lead Tech Data after its acquisition by Apollo?

Rich Hume will continue to lead Tech Data from its headquarters in Clearwater, Florida.