Following the completion of its acquisition by funds managed by affiliates of Apollo Global Management, Tech Data has revealed plans to invest approximately $750 million in digital transformation initiatives over the next five years.
Under the terms of Apollo’s $3.75 billion equity investment, Tech Data shareholders are entitled to receive $145 in cash for each share of TECD common stock owned, giving the the technology distributor an enterprise value of approximately $6 billion.
Tech Data CEO Rich Hume, who will continue to lead the company from its headquarters in Clearwater, Florida, said: “We are excited to enter Tech Data’s next chapter as a private company with our new sponsors at Apollo who have a track record of building great businesses in our sector. Having a single, strategic equity owner that’s fully aligned with our mission we believe gives us a real advantage in accelerating our transformational strategy and allows us to think more creatively – without the short-term demands that can come with public ownership.”
As part of its digital transformation, Tech Data plans to invest $750 million in a number of initiatives, including the building of a hyper-scalable digital business platform and a cloud-based digital marketplace to serve emerging technology markets and consumption models.
Robert Kalsow-Ramos, Private Equity Partner at Apollo, said: “Apollo sees Tech Data as a strong platform for meaningful growth and further diversification, and we are committed to supporting investments that build on this vision. This investment over the next five years helps ensure the company has the resources necessary to launch a bold digital enablement and innovation program that will transform the way it serves channel partners and employees.”