Berkshire Hathaway’s $5 billion offer ($140 per-share) for technology distributor Tech Data Corp. was beat by private equity firm Apollo Global Management last month with an offer of $145 per share in cash. This according to an article in The Wall Street Journal.
Tech Data is a wholesale distributor of products including computer hardware, software, consumer electronics and cellphones that reported net income of $91 million for the quarter ended October 31st. The article quotes Buffett: “It was our kind of business. It’s one you can understand.”
While Tech Data’s board approved Berkshire’s offer, Apollo outbid the offer in the week that followed. The article notes, “Berkshire famously doesn’t participate in bidding wars, and it declined to raise its price.”
The article reports that Berkshire’s last major acquisition was in 2016, when it bought aerospace manufacturer Precision Castparts Corp. for about $32 billion. In 2017, Berkshire purchased an approximate 40% interest in truck-stop company Pilot Flying J for $2.8 billion, with an agreement to increase its stake in the company to 80% in 2023.
The Berkshire bid for Tech Data, the article says, represented a reminder from Buffett to the market “that Berkshire is actively shopping for acquisitions and can quickly make decisions and pay cash for companies it wants to buy.”