Inflow Technologies backs out of Tech Data acquisition deal

Inflow Technologies backs out of Tech Data acquisition deal

Has paid a break fee for its cold feet

Credit: Tech Data

Indian distributor Inflow Technologies has backed out of an acquisition deal that would have seen it snapped up by distribution giant Tech Data.

According to tech Data, Inflow Technologies exercised its right to withdraw from closing its acquisition by Tech Data. As a result, Inflow has paid a break fee to its would-be parent.

"We respect Inflow’s decision to go in a different direction,” Tech Data Asia Pacific president Jaideep Malhotra said. “Tech Data is committed to our strategy of delivering higher value by strengthening our end-to-end portfolio and optimising our global footprint, and we continue to explore opportunities to grow our business in alignment with this strategy.”

Headquartered in Bangalore, India, Inflow Technologies was founded in 2005, and was previously backed by Datatec — owner of Westcon Group — before buying back equity in August 2013.

The distributor bills itself as a value-added distributor with expertise in cyber security, networking, unified communications and collaboration, in addition to storage and server management, infrastructure and application software.

The about-face comes nearly two months after Tech Data first unveiled plans to acquire the Indian distributor, in a move designed to drive its channel expansion across Asia Pacific.

"The addition of Inflow Technologies directly supports our strategy of delivering higher value – especially in the areas of investing in next-generation technologies, strengthening our end-to-end portfolio and optimising our global footprint," Tech Data CEO Rich Hume said at the time.

"In particular, this acquisition helps us to strengthen our portfolio of networking and security solutions we’re able to offer to our channel partners while optimising our footprint in Asia Pacific, which is an important region for Tech Data,” he said. 

Tech Data made a major foray in the Asia Pacific market in 2017 with its US$2.6 billion acquisition of Avnet’s Technology Solutions business, a move that effectively rubber stamped Tech Data’s move into the Australia and New Zealand.

Following years of speculation and channel conjecture, the distribution giant first announced its intention to acquire its rival in September 2016, with the deal now confirmed less than six months later.

Since then, Tech Data has itself become the target of a major acquisition play. In November last year, it was revealed that private equity firm Apollo Global Management had struck a deal to acquire Tech Data for US$130 per share, effectively valuing the deal at US$5.4 billion.

That was later bumped up in an amended deal worth US$6 billion with its private equity buyer, after receiving a rival bid from another interested party.

It was later revealed that Warren Buffett, chairman and CEO of Berkshire Hathaway, had tabled an offer to buy Tech Data at $140 a share, valuing the value-added distributor at just over $5 billion, before being ultimately outbid by Apollo Global Management.

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