MDP to acquire CDW for $7.3bn

CDW, a low-cost tech product retailer for businesses, governments and schools, is set to be acquired by Chicago-based Madison Dearborn in a $7.3 billion transaction.

Madison Dearborn Partners has agreed to acquire US tech/electronics retailer CDW in a transaction valued at approximately $7.3 billion (€5.4 billion).

The Illinois-based retailer, which sells name-brand products at low costs to schools, businesses and governments, was founded in 1984 and went public in 1993. It has a market capitalization of $6.7 billion.

Under the terms of the agreement, CDW shareholders will receive $87.75 per share in cash – a 16.1 percent premium over 25 May, the day preceding media reports about a potential deal.

The transaction, subject to shareholder and regulatory approval, is expected to close in the third or fourth quarter of 2007. CDW has a 30-day period to solicit alternative offers, and will do so with the assistance of its financial advisor Morgan Stanley, according to a company statement.

Both Morgan Stanley and William Blair provided fairness opinions to the CDW board. Sidley Austin is providing legal counsel to CDW, while JP Morgan and Lehman Brothers are serving as financial advisors to Madison Dearborn. Kirkland & Ellis is providing legal counsel to the private equity firm.
 
Madison Dearborn is currently investing its fifth fund, which closed last year on $6.5 billion. The firm’s consumer-oriented portfolio companies include US beverage store chain BevMo, office products retailer Bizmart and upscale restaurant chain Ruth’s Chris Steak House.