Tech Data has made its first M&A move since its 2016 merger with Avnet Technology Solutions.
On Wednesday, Tech Data announced it plans to acquire DLT Solutions, a US-based software and cloud aggregator for the public sector.
The deal is expected to close during Tech Data's fourth fiscal quarter ending 31 January 2020.
Bringing in DLT Solutions will bolster Tech Data's aggregation business in the US public sector for federal, state and local government, it claims. DLT Solutions sells software from vendors including Red Hat, AWS, Crowdstrike, Quest Software, Symantec, SolarWinds and Veritas.
The last publically available accounts for the Herndon, Virginia-based firm are from 2016, when the firm claimed to turn over $1bn in revenues and employ more than 300 staff.
In a statement, Tech Data's CEO Rich Hume said the recent moves to streamline its portfolio have freed up extra capital to make acquisitions.
"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," he said.
"The addition also demonstrates how our portfolio optimisation 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."
Talk of a $5bn takeover bid for NASDAQ-listed Tech Data by Apollo Global have made their way through the rumour mill in the last few weeks. The distributor's share price shot up by 14 per cent in after-hours trading as the news surfaced.
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