Apollo Global Management, a private equity firm, stated it has raised its bid to take Tech Data, a U.S. information technology equipment distributor, private in a deal valued at around $6 billion.
Excluding debt, the deal is valued at nearly $5.14 billion, up from a previous offer of $4.77 billion.
Following Apollo Global Management’s new offer, shareholders of Tech Data will receive $145 per share in cash, up from $130 per share, representing a premium of 12.4% to the stock’s closing price on November 27.
In a statement Tech Data said, it will solicit alternate proposals as well from third-parties during a “go-shop” period valid upto December 9, as part of the deal.
Incidentally, in 2018 the technology equipment distribution sector had attracted strong private equity interest. In January 2019, CVC Capital Partners, a buyout firm, had acquired ConvergeOne Holdings Inc, a distributor of networking and collaboration products, for $1.8 billion.
Clearwater, Florida-based Tech Data has lower operating margins than some of its peers; this is because it it invests in expanding its offerings. Case in point: two years ago, it acquired Avnet Inc’s technology solutions unit for $2.6 billion.
Apollo Global Management said, it expects the deal to close in the first half of 2020.
While Bank of America Securities is Tech Data’s financial adviser, Cleary Gottlieb Steen & Hamilton LLP is its legal counsel.
Apollo Global did not immediately respond to requests for comments.