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“There will be more equity than debt in this deal. “The equity check is over $3 billion,” the source told CRN in November. Sources close to the deal had earlier scoffed at the idea that the deal was being financed with debt, said there is little leverage involved in buying Tech Data. The deal now must be approved by shareholders as well as regulators. Tech Data said this week that the “go-shop” period had expired, leaving Apollo Global Capital as the winner of a buyout offer that stands at $145 a share. “We expect to continue to maintain a healthy balance sheet and a strong financial position that will provide our channel partners with the financial support they are accustomed to when doing business with us,” he told CRN via email. In response to Bay’s comment, Tech Data Chief Financial Officer Chuck Dannewitz said the company has a “strong financial position.” “To the extent any unsecured notes remain outstanding after the close, a multiple notch downgrade of the unsecured rating is likely.” “The review for downgrade is based on the expectation that the company will have higher financial leverage following the acquisition given the private equity ownership,” Moody’s wrote in a Nov. “You’ve seen the news that’s out there about the acquisition is going to heavily leverage up one of our competitors and there’s a strong likelihood, based on the press, that they’re going to be downgraded, if not one, multiple levels from a credit rating perspective,” Bay said.įollowing the announcement last month that it was being acquired, credit ratings agency Moody’s said it placed Tech Data “under review for downgrade.” That’s how I would respond.”īay said “furthermore, we’ve been re-validated by Moody’s,” which he said gave the company a good credit rating. Whatever happens to our parent company or the debt that they have on Ingram Micro is not on our balance sheet from an Ingram Micro perspective. “Our balance sheet is not leveraged because of the acquisition. “The acquisition that happened with Ingram Micro did not leverage our balance sheet, unlike other acquisitions that are going on that are out there right now,” Bay told CRN. However, Bay said a competitor is, and he expects its credit to get downgraded as a result. Ingram Micro’s newly announced executive vice president and president Global Technology Solutions Paul Bay said the company is not leveraged with debt due to its ownership by Chinese conglomerate HNA Group, as sources recently said.