(Reuters) – Apollo Global Management LLC is a private equity firm having contacted Tech Data Corp with a bid to get US information technology distributor for nearly $ 5 billion, people informed about the story Tuesday.
The Apollo movement comes as Tech Data shares are already hovering at high levels, among investors' hope that demand from small and medium-sized businesses will continue its strong offerings despite concerns about cooling the economy.
Apollo has recommended that you pay around $ 130 per cash share to Tech Data, which one of the sources said. Tech Tech trading ceased trading Tuesday at $ 111.34.
There is no certainty that Tech Data will negotiate or that any further dealings, sources, will be sought without being identified as the matter is confidential. Apollo refused to comment, and Tech Data did not respond to comments.
Tech Data in Clearwater, Florida, provides computers, mobile phones, printers, servers and other information technology infrastructure for corporate resellers, direct marketing and retailers. It has market capitalization of $ 4 billion, with debt and cash on hand at the end of July of $ 1.3 billion and $ 738 million, respectively.
Tech Data has lower operating margins than some of its colleagues, as it invests to expand its offers. Two years ago, it found Avnet Inc.'s technology solutions business for $ 2.6 billion.
The distribution of technology equipment sector has attracted a strong private equity interest over the past year. In January, a purchasing firm acquired CVC Partners Partners ConvergeOne Holdings Inc, a distributor of networking and collaboration products, for $ 1.8 billion.
Apollo has also expressed an interest in the sector, which last year made an unsuccessful bid to Ingram Micro Inc, a US electronics distributor, from HNA Group Co for up to $ 7.5 billion.
Reporting by Greg Roumeliotis in New York; Edited by Lisa Shumaker
. Services (TRBC) (t) Major Reports (t) Enterprise Reporting (t) Technology Equipment (TRBC) (t) Investment and Fund Management Operators (TRBC) (t) Private Equity Funds (t) United States of America