Tech Data To Buy Public Sector Solution Provider Giant DLT Solutions

Tech Data says its proposed acquisition of DLT Solutions, No. 42 on the 2019 CRN Solution Provider 500, will help accelerate growth for partners serving the U.S. federal, state and local government markets.

Tech Data has agreed to purchase solution provider DLT Solutions to help channel partners better capture opportunities in the U.S. public sector space.

The Clearwater, Fla.-based distribution titan said the proposed acquisition of Herndon, Va.-based DLT Solutions, No. 42 on the 2019 CRN Solution Provider 500, will help accelerate growth for partners serving the federal, state and local government markets. DLT Solutions has its own robust network of channel partners as well as a broad portfolio of more than 50 in-house contract vehicles, Tech Data said.

“This acquisition combines our public sector expertise and capabilities with a leading Fortune 100 company known for creating value across the technology ecosystem,” DLT Solutions CEO Art Richer said in a statement. “It represents an opportunity to apply our unique public sector value proposition to a broader set of vendors and partners.”

[Related: DLT Solutions Taps Former immixGroup Leader Art Richer As Next CEO]

Terms of the deal, which is expected to close in Tech Data’s fiscal quarter ending Jan. 31, 2020, were not disclosed. Upon closing of the transaction, the distributor said DLT Solutions will become a wholly owned subsidiary of Tech Data. Tech Data’s stock is down $1.37, or 1.12 percent, to $120.77 in trading early Wednesday.

Frank Vitagliano, CEO of the Global Technology Distribution Council, an industry association for distributors, said the deal is another sign of distribution evolving to deliver next-generation, emerging technology opportunities to partners.

"This deal has big positive implications for all partners,” said Vitagliano. “This focus here is on bringing digital transformation capabilities to partners serving the federal market. This is a huge win for partners who are trying to step up to the digital transformation challenge in a vertical market like government.”

DLT Solutions was founded in 1991, employs 407 people, and has been owned by private equity firm Millstein & Co. since February 2015, according to LinkedIn and Crunchbase. Prior to the purchase by Millstein & Co., DLT Solutions had been majority-owned by private equity firm TZP Capital Group.

The company has been led by Richer since May 2017, who previously had been CEO of public sector player immixGroup during its March 2015 sale to Centennial, Colo.-based distributor Arrow Electronics. Richer said at the time of his appointment that he was looking to drive growth for DLT Solutions around cloud, cybersecurity and big data analytics.

CRN reported in April 2017 that DLT Solutions had brought in in $1 billion of annual revenue.

“This acquisition reflects our strategy of delivering higher value—strengthening our end-to-end portfolio and accelerating our capabilities in next-generation technologies—and we look forward to welcoming DLT’s colleagues to Tech Data,” Tech Data CEO Rich Hume said in a statement.

This is Tech Data’s first acquisition since its $2.6 billion monster buy of Avnet’s Technology Solutions business in September 2016. Prior to that, Tech Data bought solution provider Signature Technology Group (STG) in May 2015.

Tech Data Americas President Joe Quaglia told partners earlier this month that the distributor is in the midst of a transformation aimed at making it a better partner around emerging technology and digital transformation activities. The distributor launched its EOS—Enhance, Optimize and Strengthen—initiative in late 2018 once it had finished integrating Avnet’s Technology Solutions business, Quaglia said.

“The addition [of DLT Solutions] also demonstrates how our portfolio optimization actions are freeing up capital, which is enabling us to invest in high-quality growth opportunities that advance our strategy and provide higher-value solution offerings to our partners,” Hume said in the statement.