Deal comes two weeks after rumors of Tech Data being an acquisition target
Tech Data, which two weeks ago was rumored to be the target of a $5 billion bid by private equity firm Apollo, is expanding its capabilities in the public sector with its own acquisition of technology aggregator DLT Solutions.
The Lowdown: DLT, headquartered in Herndon, Virginia, will become a wholly owned subsidiary of Tech Data once the deal closes during the company’s fiscal fourth quarter, which ends in January 2020. No financial terms were disclosed.
The Details: Tech Data will look to the DLT acquisition to bolster its presence in federal, state, and local markets and enhance the solutions and services it offers to channel partners working in the U.S. public sector market. The Clearwater, Florida-based distributor has more than 10,000 resellers in the public sector IT space – which includes federal government, state, local and education (SLED), and health IT – which the company estimated was a $258 billion market opportunity in fiscal-year 2019.
DLT, founded in 1991, resells a broad array of hardware and software for government sectors and educational institutions to organizations and channel players. Included among the myriad tech vendors whose products DLT sells are Red Hat, Palo Alto Networks, Autodesk, BMC Software, Cloudera, Google, NetApp, and Oracle. It’s also a partner for cloud giant Amazon Web Services.
The Impact: The acquisition of DLT will further accelerate Tech Data’s efforts to grow its presence around the world and expand its cloud business.
Background: According to a report in Reuters this month, Apollo Global Investments had made an unsolicited $5 billion bid for Tech Data, the world’s second-largest technology distributor, the latest tech company to catch the eye of a private equity firm.
The Buzz: “This acquisition reflects our strategy of delivering higher value – strengthening our end-to-end portfolio and accelerating our capabilities in next-generation technologies – and we look forward to welcoming DLT’s colleagues to Tech Data,” said Rich Hume, CEO of the distributor. “The addition also demonstrates how our portfolio optimization actions are freeing up capital, which is enabling us to invest in high-quality growth opportunities that advance our strategy and provide higher-value solution offerings to our partners.”
“We’re thrilled to join the Tech Data team,” said DLT CEO Art Richer. “This acquisition combines our public sector expertise and capabilities with a leading Fortune 100 company known for creating value across the technology ecosystem. It represents an opportunity to apply our unique public sector value proposition to a broader set of vendors and partners.”