Tech Data (TECD) Agrees to Higher $145/Share Takeover from Apollo

Tech Data (Nasdaq: TECD) today announced that it has entered into an amendment to its previously announced definitive agreement in which Tiger Midco, LLC, an affiliate of funds managed by affiliates of Apollo Global Management (NYSE: APO), will acquire all of the outstanding shares of Tech Data common stock. The Amendment provides that the consideration to be received by holders of Tech Data common stock has been increased to $145 per share in cash from $130 per share in cash, among certain other changes. The Amendment was unanimously approved by the Board of Directors of Tech Data, and the revised purchase price represents an 11.5 percent increase in the price per share of Tech Data’s common stock provided in the Original Agreement. The revised purchase price also represents a 30.2 percent premium to the unaffected closing share price of Tech Data’s common stock ended Oct. 15, 2019, the last trading day prior to published market speculation regarding a potential transaction involving Tech Data. The revised transaction has an enterprise value of approximately $6.0 billion.

Pursuant to the “go-shop” provisions of the Original Agreement, on November 23, 2019, Tech Data received a “Company Takeover Offer” (the “Competing Offer”) from another bidder. On November 24, 2019, the Tech Data Board of Directors unanimously determined, in consultation with its legal and financial advisors, that the Competing Offer constituted a “Company Superior Proposal” as defined in the Original Agreement and notified Parent of its determination. In response, on November 27, 2019, Parent submitted a revised proposal with the terms set forth in the Amendment. After considering Parent’s revised proposal, later in the day on November 27 the Tech Data Board of Directors determined that the Competing Offer no longer constituted a Company Superior Proposal and determined to enter into the Amendment with Parent.

The Tech Data Board of Directors has unanimously approved the Amendment and recommends that Tech Data shareholders vote in favor of the transaction. The transaction is not subject to a financing condition and is expected to close in the first half of calendar year 2020, subject to the satisfaction of customary closing conditions including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, foreign regulatory approvals and approval by the holders of a majority of the outstanding Tech Data shares. Tech Data expects to hold a Special Meeting of Shareholders to consider and vote on the transaction agreement as soon as feasible after the mailing of the proxy statement to shareholders.

Consistent with the Board’s commitment to maximizing shareholder value, the terms of the Original Agreement (as amended by the Amendment) provide that Tech Data will be permitted to continue to actively solicit alternative acquisition proposals from third parties during a “go-shop” period from the date of the Original Agreement until 11:59 p.m., New York City time, on Dec. 9, 2019. There is no guarantee that this process will result in a superior proposal.

Bank of America Securities is serving as financial advisor to Tech Data, and Cleary Gottlieb Steen & Hamilton LLP is acting as legal counsel.

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