Monday Morning Impact – November 25

Tech Data to be acquired by Private Equity

Tech Data has entered into a definitive agreement to be acquired by an affiliate of funds managed by affiliates of Apollo Global Management, Inc., a global alternative investment manager. Through the agreement, the affiliate of the Apollo Funds will acquire all of the outstanding shares of Tech Data common stock for $130 per share in a transaction with an enterprise value of approximately $5.4 billion.

The purchase price represents a 24.5 percent premium to the unaffected 30-day volume weighted average 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 the company.

“Over our 45-year history, Tech Data has grown to become one of the largest and most respected technology distributors in the world,” said Tech Data CEO Rich Hume. “This investment by funds managed by one of the world’s leading global alternative investment managers will afford us additional resources to accelerate our ability to bring to market the technology products and solutions the world needs to connect, grow and advance.”

“Through this investment, we are committed to expanding Tech Data’s position as a trusted partner to the world’s leading technology vendors while providing best-in-class customer service,” said Matt Nord, Co-lead Partner of Apollo Private Equity. “As a private company with our sponsorship and a strong balance sheet, Tech Data will have significant financial and strategic flexibility to drive growth going forward.”

Following the close of the transaction, Rich Hume will continue to lead Tech Data as chief executive officer, and the company will continue to be headquartered in Clearwater, Florida. Tech Data will become a privately held company, and Tech Data’s common shares will no longer be publicly listed.

The transaction is not subject to a financing condition and is expected to close in the first half of calendar year 2020.

Channel Impact^®
Tech Data becomes the latest key player to enter the world of private equity.

OpenText to Acquire Carbonite

OpenText, a Waterloo, Ontario company specializing in Enterprise Information Management software, has announced plans to acquire Carbonite, Inc., a provider of cloud-based subscription data protection, backup, disaster recovery and end-point security to small and medium-sized businesses and consumers.

Through the tender offer, OpenText intends to pay $23 per share for Carbonite stock for a total purchase price of approximately $1.42 billion, inclusive of Carbonite’s cash and debt. The transaction is expected to close within 90 days, at which point financial projections and target models will be provided.

“Cloud platforms and secured, smart end-points are essential Information Management technologies as businesses transform into Industry 4.0,” said Mark J. Barrenechea, OpenText CEO & CTO. “This acquisition will further strengthen OpenText as a leader in cloud platforms, complete end-point security and protection, and will open a new route to connect with customers, through Carbonite’s marquee SMB/prosumer channel and products.”

“We entered Fiscal 2020 with a solid balance sheet and we are off to a strong start with the announced acquisition of Carbonite as part of our total growth strategy,” added OpenText EVP & CFO, Madhu Ranganathan. “Once integrated, we expect to increase our annual recurring revenues, deliver strong cloud growth, and expand cloud margins and adjusted EBITDA.”

Channel Impact^®
The acquisition of Carbonite is expected to extend OpenText’s leadership in the Enterprise Information Management (EIM) market by complementing OpenText’s security offerings in data loss prevention, digital forensics, end-point detection and response with the addition of Carbonite’s data protection and end-point security solutions. The acquisition also adds significantly to OpenText’s Cloud business.

HPE Updates Partner Ready Program for HPE as-a-Service

Hewlett Packard Enterprise (HPE) has announced enhancements to its Partner Ready Program designed to better support HPE GreenLake, the company’s edge-to-cloud as-a-Service offering.

Related programs and tools include demo capabilities and accelerated pricing with the option for differentiated pricing through deal registration. Increased benefits are available to partners selling into new customers and/or selling new solutions to existing customers. Partners can further develop solution mastery through self-selected, progressive continuous learning paths, competency curricula, and new technical certifications.

“Together, HPE and our partners are seizing on the unique opportunity to deliver transformative as-a-Service solutions to customers worldwide,” said Paul Hunter, HPE’s Global Channel Chief. “The HPE partner community has become a powerful force in driving the terrific growth of HPE GreenLake, and our updated Partner Ready program is designed to provide them with an unmatched combination of sales and field enablement, and financial incentives and rewards, to help them continue to serve customers and grow their business.”

The HPE GreenLake channel business has grown over 300 percent in the last three years, and 500 partners have active HPE GreenLake deals. To further accelerate this growth, the company is adding additional full resources, additional sales specialists, tools and benefits to ensure partners can navigate customer conversations, and rapidly convert HPE GreenLake opportunities.

Channel Impact^®
Based on partner feedback, the redesigned program is designed to deliver consistency through a stable and predictable program framework, compensation model and membership acceleration.