Madison Dearborn to Buy CDW for $7.3 Billion

Computer retailer CDW Corp. announced Wednesday it has agreed to be bought by private equity firm Madison Dearborn Partners LLC for $7.3 billion. CDW shareholders will get $87.75 in cash for each share of CDW common stock they hold. The price represents a 16.1% premium over the shares' closing price of $75.56 on May 25, 2007, the last trading day before news was published of a possible takeover. CDW's shares closed up 2.5% Wednesday at $85.17. Last month, CDW reported a better-than-forecast 24.5% rise in Q1 earnings. Results were helped by strong sales of notebook computers, storage equipment, software and video-related equipment. The company has also implemented a sales reorganization and entered a new market (customized computer systems). The transaction, which is subject to shareholder approval, is expected to close at the end of Q3 or the beginning of Q4. Company founder Michael Krasny owns about 22% of the company, and he has agreed to vote in favor of the buyout.

Sources: Bloomberg, Business Journal, Reuters
Commentary: CDW Corp. Goes Private: Investors Lose a Useful Read Into Channel Sales for Tech Equipment • CDW Corp: With Solid Earnings and Buyout Talk, Probably Little Upside Left • Madison Dearborn in Talks to Buy CDW -- WSJ
Stocks/ETFs to watch: CDW Corp. (CDWC). Competitors: Insight Enterprises Inc. (NSIT), PC Connection Inc. (PCCC), Dell Inc. (DELL), Systemax Inc. (SYX)
Conference call transcript: Q1 2007

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