CDW Corp. Goes Private: Investors Lose a Useful Read Into Channel Sales for Tech Equipment

Yesterday, when the CDW Corp. (CDWC) buyout talks were still just a rumor, I said

with the stock now trading with a 19x FY2008 P/E multiple and a 12x EV/trailing EBITDA, I wonder how much more a buyer would be willing to pay. I wish I had bought this one earlier, but it’s looking way too late now.

CDW to be bought by Madison Dearborn for $7.3 bln

CDW in a statement late on Tuesday said its board had held an auction for various potential bidders before it approved the Madison Dearborn deal, under which CDW shareholders will get $87.75 in cash for each share of CDW common stock.

I was wrong. The one-day gain should still be about 4-5% from when I made that comment, which makes for an annualized rate I don’t want to figure out. Still, had the deal fallen through the downside was probably greater than the 4-5% so I don’t think I was too wrong.

Truth be told, more than missing the trade opportunity, I regret losing such a useful read into channel sales for tech equipment. I don’t have the resources to conduct channel checks, so such proxies are my next-best chance. Without CDW’s monthly sales reports it will be more difficult to get a handle on tech demand.

CDWC 1-yr chart: