CDW to purchase Micro Warehouse

CDW Corp. is buying the U.S. and Canadian operations of competitor Micro Warehouse Inc., Norwalk, Conn., the two companies announced today. The deal is worth about $22 million.

The boards of directors of both companies approved the transaction, which includes existing inventories and intellectual capital, trademarks and copyrights.

CDW officials said they anticipate completing the U.S. portion of the transaction today. The Canadian transaction is subject to regulatory approvals.

CDW is not acquiring the accounts receivable or the liabilities of Micro Warehouse, but will receive a service fee of 5 percent for collecting existing receivables. Transition costs, including severance packages, and costs related to the transaction will total $10 million to $12 million, CDW said in its press release.

Approximately 50 percent of Micro Warehouse's U.S. revenue is from corporate customers, 35 percent from the public sector and 15 percent from consumers. The company reported 2002 revenue of $2 billion, according to Hoover's Online.

Micro Warehouse's operations in the United Kingdom, France, Germany and the Netherlands are not included in the transaction.

"Patience pays. We waited for the right opportunity, and we're announcing it today," said John Edwardson, CDW's chairman and chief executive officer. "From the beginning, we've set very clear acquisition criteria, which are [to] expand our customer base, extend our geographic reach or enhance our product capabilities. With this investment, we have achieved all three objectives and delivered value to every CDW stakeholder group."

CDW, headquartered in Vernon Hills, Ill., recorded almost $4.3 billion in revenue in fiscal 2002. The company, which provides technology products and services for commercial, government and educational institutions nationwide, was ranked No. 79 on Washington Technology's Top 100 federal prime contractors in 2003, with $62.2 million in contracts.

By comparison, GTSI Corp. of Chantilly, Va., the top federal reseller in 2003, ranked 17 on the Top 100. The company reported 2002 revenue of almost $935 million, but of that, $433 million were prime contracts with federal agencies.

Reader Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

What is your e-mail address?

My e-mail address is:

Do you have a password?

Forgot your password? Click here


contracts DB

Washington Technology Daily

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.