Largo-Raymund Center

Tech Data, located on Bay Vista Drive in northeast Largo, employs more than 2,000 workers at its headquarters.

LARGO — Edward C. Raymund founded Tech Data Corp. in 1974. Seven years later, the company that was reselling small computer supplies such as printer ribbons and cables employed about a dozen people at a small office near the firm’s current headquarters in northeast Largo.

On Nov. 13, the small, homegrown business that has evolved into a Fortune 500 company agreed to be sold for approximately $5.4 billion to Apollo Global Management.

“Over our 45-year history, Tech Data has grown to become one of the largest and most respected technology distributors in the world,” Tech Data chief executive Rich Hume said in a press release. “This agreement reflects the significant progress we have made in our strategy of delivering higher value and positions us for continued growth and success.”

Apollo, a private equity firm based out of New York, will add Tech Data to its diverse portfolio of businesses that includes Hostess, AMC Theatres, ADT, and Chuck E Cheese’s.

Apollo, with assets of approximately $323 billion, will pay $130 for each share of Tech Data’s common stock, which is a 24.5% premium.

According to a transcript of a global town hall presentation made to all of the company’s 14,000 employees Nov. 13, Hume said life will be business-as-usual at the company’s headquarters, which has a Clearwater mailing address, but is actually within Largo’s city limits. 

“Our headquarters will remain in Clearwater and our global footprint will remain the same as well,” Hume said in the transcript that was filed to the Securities and Exchange Commission. “... In this circumstance, we are being acquired by a portfolio company. We are not being pushed together with another company. So, we continue to stand alone as Tech Data within the Apollo portfolio looking into the future.”

The sale means Tech Data, which had sales of $37 billion in fiscal year 2019, will become a privately held company and its shares will no longer be publicly listed.

However, that doesn’t mean it couldn’t become public at some point in the future. 

“We are uncertain as to what Apollo’s specific plans are but typically what happens is private equity firms work to build a bigger, better business overall,” Hume said in the town hall presentation. “And then through time, they potentially take those companies back into the public market.”

What appears to be more certain is that Apollo plans to invest in its new acquisition.

“We have tremendous respect for Tech Data’s talented management and colleagues around the globe and commend their success in establishing Tech Data as a leader at the center of the IT ecosystem,” said Robert Kalsow-Ramos of Apollo Private Equity in a press release. “We are excited to work with the Tech Data team and continuing to invest in the company’s people and end-to-end portfolio.”

The acquisition is not wrapped up yet, though. Shareholders must first evaluate the proposal and vote on the deal, which is expected to close in the first half of 2020. In the meantime, any other parties interested in purchasing the firm now have the opportunity to make an offer. 

What it means for Largo

The news sent shockwaves throughout the business world, but it also has local implications.

City of Largo Economic Development Director Teresa Brydon said the area has been fortunate to have the firm here since 1974 and have it grow into the global powerhouse operation that it is today.  

“They employ over 2,000 persons in their headquarter operations at Bay Vista and many of those employees live in the Largo area and throughout Pinellas County,” she wrote in an email to Tampa Bay Newspapers. “Tech Data has also added new businesses in our community — vendors who provide services to their operations and former employees becoming entrepreneurs are examples.”

She added that the company and its employees have also made a difference in the community, building up plenty of goodwill. 

“They support many local charitable organizations and work with the school system to provide backpacks and other school supplies as well as events that promote STEM,” she said. “Their community involvement has earned them much recognition in the Tampa Bay area and it is anticipated that they will continue to be involved in our community.”

Hume, who will stay on as chief executive officer, confirmed to employees that those efforts will continue. 

“Apollo absolutely sees the value in their portfolio companies maintaining their cultures and their values,” he said. “So, things which are really important to us like our community and community service are completely supported by our new potential owner. In addition to that, our values which are important to us — diversity and inclusion as well as collaboration and integrity — all of those things are maintained and are held intact.”