Warren Buffett Bid $5 Billion For Tech Data Before Apollo Won The Deal

By Amit Chowdhry ● December 3, 2019
  • In an interview with The Wall Street Journal, Berkshire Hathaway chairman and CEO Warren Buffett said that he offered $5 billion for Tech Data before Apollo won the deal

In an interview with The Wall Street Journal, Berkshire Hathaway chairman and CEO Warren Buffett said that he offered $5 billion for Tech Data. However, Buffett refused to get into a bidding war against Apollo Global Management. Apollo ended up winning the bid at $5.4 billion.

To get the bid going, Buffett said that Bank of America approached Berkshire chief investment manager Todd Combs about buying Tech Data. After Buffett reviewed Tech Data’s numbers, he decided to make a major bid.

“It was our kind of business. It’s one you can understand,” said Buffett in the interview with The Wall Street Journal. “I may not understand all of the products that they sell and I may not understand what the customers who buy the products do with them, but I do understand the middleman’s role.”

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Berkshire Hathaway Energy chairman and CEO Greg Abel went to Tech Data’s headquarters in Florida to learn more about the company. And after that visit, Buffett bid $140 per share. Tech Data’s board actually approved of Berkshire’s offer, but then Apollo countered that bid with $145 per share. And then Buffett declined to increase his offer.

“In the years ahead, we hope to move much of our excess liquidity into businesses that Berkshire will permanently own. The immediate prospects for that, however, are not good: Prices are sky-high for businesses possessing decent long-term prospects,” said Buffett in a letter about Berkshire’s performance vs. the S&P 500. “That disappointing reality means that 2019 will likely see us again expanding our holdings of marketable equities. We continue, nevertheless, to hope for an elephant-sized acquisition. Even at our ages of 88 and 95 – I’m the young one – that prospect is what causes my heart and Charlie’s to beat faster. (Just writing about the possibility of a huge purchase has caused my pulse rate to soar.)”

One of Berkshire’s last major investments was the purchase Precision Castparts for $37 billion in 2016.

Tech Data hit $37.2 billion in annual revenues. After the Apollo deal was announced, Tech Data CEO Rich Hume said that it will give partners better products and services through access to capital that they would be unable to duplicate on its own. Apollo has more than $320 billion worth of assets under management.