Brean Capital Raises Price Target as Tech Data (TECD) Announces Tech Solutions Segment Acquisition

September 20, 2016 9:55 AM EDT
Get Alerts TECD Hot Sheet
Price: $84.71 +0.89%

Rating Summary:
    3 Buy, 4 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 9 | New: 77
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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."

For an analyst ratings summary and ratings history on Tech Data click here. For more ratings news on Tech Data click here.

Shares of Tech Data closed at $84.80 yesterday.



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