Private equity firm buys CDW for $7.3 billion

Computer retailer CDW became the latest company to be swallowed up by a private equity firm, announcing on Tuesday it had agreed to be bought by Madison Dearborn Partners for $7.3 billion. CDW shares, which have already climbed about 39 percent since early March, had risen on Tuesday morning to $84.90, their highest Nasdaq level since September 2000.

CDW said in a statement late on Tuesday its board had held an auction for various potential bidders before approving the Madison Dearborn deal, under which CDW shareholders will get $87.75 in cash for each share of CDW common stock. The price of the deal represents a premium of about 16.1 percent over CDW's closing share price of $75.56 on May 25, the last trading day prior to published reports regarding a potential transaction. Under terms of the deal, CDW's board will not declare an annual dividend in 2007, CDW said.

Story Copyright © 2008 Reuters Limited. All rights reserved.

[fred dunn]

So now when buying from CDW you'll pay...

the interest and elevated prices due to the equity firms wanting a quick return.

Say goodbye CDW, it was a good run while it lasted.

[Renegade Knight]

Not Quite

The normal run is they will "stream line the company" then flip it back to being public.

Then the new shareholders will find out that streamlined only looks good on paper and the reality is much much different. Stock prices will fall...

Plan B. And so much harder for Private Equity to resist is to actually work long and hard for a company to live up to it's potential. Then when they flip it (many years later since nothing happens overnight) they get an even better return but nothing in the short run.

To tell the difference you have to watch the news. Private Equity companies play their cards close to their vest.

[xeonpro]

CDW

this sucks. I've always liked CDW.
Maybe its time to switch to PC Connection! ...based right in my
state too = )

[tgrenier]

never liked them anyway

They have pestered me many times and always end up with higher prices and less knowledge then PC Connection. CDW reps are always changing and shifting as soon they actually learn your business. MY PC Connection Rep has been there for years, knows me and the companies I have worked for. He also manages to stay with the companies I have left behind. I vote for PC Connection.

Call Steve if you need anything
800-986-2258 direct line.
The toll free direct line is very convenient too.