Tech Data has struck an amended acquisition deal worth US$6 billion with its private equity buyer, after receiving a rival bid from another interested party.
The distributor told shareholders on 27 November that it had entered into an amendment to its previously announced definitive agreement with Tiger Midco, an affiliate of funds managed by affiliates of Apollo Global Management.
It emerged in mid-November, after weeks of speculation, that private equity firm Apollo Global Management had entered a deal to acquire Tech Data for US$130 per share, effectively valuing the deal at US$5.4 billion.
However, Tech Data received a company takeover offer from another bidder on November 23. It was found that the competing offer constituted a superior proposal.
In response, on November 27, Tiger Midco submitted a revised proposal, increasing its offer to $145 per share in cash from $130 per share in cash, among other changes.
With the revised deal on the table, the Tech Data board ultimately determined that the competing offer no longer constituted a superior proposal.
The revised transaction has an enterprise value of approximately US$6 billion, substantially more than the value of the initial deal. Indeed, the revised purchase price represents an 11.5 per cent increase in the price per share of Tech Data’s common stock provided in the original agreement.
The transaction, as it stands, is expected to close in the first half of calendar year 2020, subject to the satisfaction of customary closing conditions.
It is expected that Tech Data CEO Rich Hume will continue to lead the company, which will remain at its Clearwater, Florida headquarters. Tech Data board of directors unanimously approved the transaction and recommend shareholders to vote in favour of the deal.
As a result of the buyout, Tech Data will become a privately held company.
"The transaction will enable us to build on our success, making Tech Data a growth platform and enabling us to further differentiate and expand our end-to-end solutions and provide our channel partners with unparalleled reach, efficiency and expertise,” Hume said when the initial deal was announced.