martin wolf Transaction Analysis

• Not Disclosed

• Earlier today Tech Data (Nasdaq: TECD) announced its intent to acquire IT solution provider DLT Solutions from current private equity owner Millstein & Co. Terms of the deal were not disclosed. 
• Upon closing, DLT and its’ 407 employees will become a wholly-owned subsidiary of Tech Data.
• Tech Data’s stock is unchanged since the deal was announced. 

• Goodbye To PE: DLT has been a portfolio company of Millstein & Co since 2015. Before that, the company was owned by TZP Group (martinwolf advised DLT on its sale to TZP in 2009, and then advised TZP when it sold DLT to Millstein & Co in 2015). This will be the first time since 2009 that DLT has been owned by a strategic. However — this might not be ‘goodbye’ to PE forever. In mid-October, there were rumors in the marketplace of a potential Tech Data takeover bid from Apollo Global Management. 
• Hello To Hybrid: This is Tech Data’s first purchase since its blockbuster $2.6 billion acquisition of Avnet. At first glance DLT Solutions does not appear to be in Tech Data’s wheelhouse — Tech Data sells to resellers, while DLT’s customers are end-users. However, this acquisition positions Tech Data as more of a hybrid player in the channel and expands its value proposition, especially in government solutions. 
• More M&A On The Horizon?:  Expect Tech Data to continue to be an active participant in the M&A markets, CEO Rich Hume emphasized in the press release. “The addition of DLT demonstrates how our portfolio optimization actions are freeing up capital, which is enabling us to invest in high-quality growth opportunities that advance our strategy and provide higher-value solution offerings to our partners,” he said.
•  

For more information about this transaction, click  here to read the press release.