Brean Capital Raises Price Target as Tech Data (TECD) Announces Tech Solutions Segment Acquisition
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Brean Capital reiterated a Buy rating on Tech Data (NASDAQ: TECD), and raised the price target to $105.00 (from $82.00), following the company's announced acquisition of AVT’s Technology Solutions segment. The deal may not close for as much as 9 months. However, if TECD executes through CY19, this should be 10x - 14x a normalized EPS of ~$12.00.
Analyst Ananda Baruah commented, "TECD announced acquisition of AVT’s Technology Solutions (TS) segment to strengthen TECD’s position providing end-to-end IT distribution from data centers to the living room. The deal is expected to significantly broaden TECD’s value-added distribution business in the Americas and Europe, while introducing TECD to the fast-growing APAC region. Significant EPS accretion is expected at deal close from the acquired $9B and $310M+ in TTM AVT's TS sales and operating income, compared to standalone TECD revenue and EBIT of $26B and $338M in TTM TECD sales and operating income. The new TECD will have $35B in revenue with distribution in high-value data center accounting for 45% of the revenue mix compared to 29% before. TECD believes that TTM pro-forma operating income would have more than doubled if accounting for EBIT from TECD and AVT's TS respectively, as well as $100M of cost savings."
Shares of Tech Data closed at $84.80 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change, Mergers and Acquisitions
Related EntitiesDefinitive Agreement, Brean Capital
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