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Tech Data has started to flex its financial muscles, sealing a major acquisition just a few months after it came under Apollo’s ownership.
The distributor has chosen to pick up Innovix Distribution to increase its presence in the Asia Pacific region and expand the business in Hong Kong, Malaysia and Singapore.
The deal might not mean that much to those solely focused on the UK channel, but it does indicate that Tech Data’s new owners are prepared to back expansion – and more consolidation could be coming.
“Innovix is a leading regional IT distributor with an expansive range of IT products, solutions and services that will enhance our vendor portfolio, increase our customer base and strengthen our end-to-end solutions capabilities,” said Jaideep Malhotra, president, Asia Pacific at Tech Data. “Innovix’s strong team of 500-plus experienced professionals have in-depth local industry knowledge that will augment our expertise in the market and strengthen our ability to deliver higher value to our channel partners across the region.
“This investment demonstrates our commitment to the Asia Pacific region and is an important, early milestone in our transformational journey since being acquired by Apollo Global Management.”
Eric van der Hoeven, chief executive officer at Innovix, said the firm had been going for more than six decades and had a strong reputation in the APAC region. The distributor, headquartered in Hong Kong, serves 8,000 channel partners across Asia.
“Our focus on helping businesses accelerate growth and capitalise on digital transformation is perfectly aligned with Tech Data’s mission to connect the world with the power of technology, and we look forward to working together to serve this market and stay ahead of evolving technologies and consumption models,” he said.
Back in June, Tech Data started to indicate what the Apollo ownership would mean on the financial front, revealing plans to spend $750m in the next five years to accelerate digital transformation initiatives.
Speaking at the time, Tech Data CEO Rich Hume said Apollo had made a multi-year commitment to support the distributor’s growth ambitions.
“Our new sponsors at Apollo have a track record of building great businesses in our sector,” he said. “Having a single, strategic equity owner that is fully aligned with our mission 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.”
Matt Nord, co-lead partner at Apollo Global Management, confirmed that funds would be made available to support the right strategic moves. “The Tech Data team will have the strategic and financial flexibility to invest in new technology, expand services and pursue transactions that we believe will drive long-term value creation,” he said in June.