martin wolf Transaction Analysis

• Enterprise Value: $5 billion

• Private equity firm Apollo Global Management (NYSE: APO) approached Tech Data (NASDAQ: TECD) with an offer to acquire the IT distributor for $5 billion, approximately $130 per share in cash, according to a report by Reuters.
• Tech Data shares closed at $111.34 on Tuesday after news broke of the reported acquisition. Shares are up 12.2 percent after market open, trading at $124.61.
• Apollo shares are down 1.0 percent.

• Last Year’s Failure, This Year’s Success?:  This bid comes a year after Apollo’s attempt — and failure — to acquire Tech Data rival  Ingram Micro  from HNA Group for up to $7.5 billion (Rumors currently suggest RRJ Capital will acquire Ingram Micro from HNA Group).
• Interest in IT: Apollo has a demonstrated history in the IT channel with notable acquisitions in the MSP, cloud services and IT solutions provider markets. It acquired Rackspace and ADT in 2016 and Presidio in 2015. Apollo voted to sell its 42 percent stake in Presidio to BC Partners in early August of this year.
• Tech Data is Hot: This $5 billion bid comes on the heels of an impressive run for Tech Data. It’s financially robust and reported better than expected earnings in late August. The company’s revenue is up 2.32 percent, gross profit is up 6.76 percent, and its earnings per share have risen 9.64 percent YoY. In addition, Tech Data continues to beneift from an additive M&A strategy, reaping the benefits of its 2016 acquisition of Avnet for $2.6 billion.
• For more information about this reported transaction, click  here to read the article.
  *Financial information from the Reuter’s article  
  martin wolf  was not the advisor in this transaction.
  To receive instant analysis on the day’s business news from the martinwolf team, follow us on Twitter @mw_advisors and on Linkedin at martinwolf