Tampa Bay Business Journal
After one-month whirlwind courtship, Tech Data CEO talks $5.4B Apollo acquisition details
13 November 2019
One month after serious conversations with trips to both Tampa and New York City Apollo Global has formally submitted a $5.4 billion bid to
buy Clearwater-based Tech Data Corp., the Tampa Bay areas largest public company.
The good news is Apollo is in the business of owning
companies, Tech Data CEO Richard Hume said in an interview with the Tampa Bay Business Journal, about Apollos long list of acquisitions. So, they know how to approach it. ... I think having them follow us, they had recognized,
first of all, we had an industry-leading capability within the IT distribution space. They appreciated our capabilities in our team and then they have obviously studied our journey and performance of the company over a long period of time and
admired our execution. As they got closer to that, they became more interested.
Tech Data, which had $37 billion in reported 2018 revenue, was
not in need of financial assistance. However, when Apollo Global presented the offer with a 24 percent premium to the unaffected 30-day volume weighted average closing share price, Hume said he had a duty
to look at the deal for his shareholders.
It was a combination of being very attractive with shareholders and positioning the company with deep
resources to invest in our future, Hume said. This industry is always in a state of flux, but having a deeper capability to invest in the business going forward is something that can accelerate your business going forward. That was sort
of a deciding moment.
Tech Data has until Dec. 9 in what is known as a go shop deal, allowing Tech Datas banking institution Bank
of America to field any additional interest or offers.
Because the deal is in flux, and both Tech Data (NASDAQ: TECD) and Apollo Global (NYSE: APO) are
publicly owned companies, Hume was careful as to what details to disclose including the amount of potential millionaires made from the buyout, for example.
But some concrete shifts will occur: the 10-person board would sunset and be replaced with Apollo Globals own.
Hume will no longer run the quarterly earnings calls. Perhaps the largest concern was the location of the Clearwater headquarters, which Hume was firm to say would stay in place.
Its not a competitive acquisition where two companies are pushed together; this is a situation where Tech Data stays as one company, Hume
said. Its headquarters will continue to be Clearwater. We will have the epicenter of running the business and have the full intention of making sure the culture and value is maintained.
While the company would no longer have any local ownership, Hume says if the deal goes through, Tech Data will continue to do what made it appealing to Apollo
Global in the first place: focus on the culture within the company and beyond the office walls.
Apollo absolutely encourages us to have autonomy
and keep our personality, so we fully intend to make sure thats the case, he said. From the community perspective, whats incredible is engagement comes from the bottom, not top down. As constituents come together with
interest, the initiatives grow and flourish. We will not change that.