CDW Buys $390 Million IT Solutions Provider

Sep 19, 2006 5:10 PM  By

Computer reseller CDW Corp. has agreed to acquire Berbee Information Networks Corp., one of the country’s largest independent IT solutions providers, for approximately $175 million in cash. The deal is expected to close by the end of October.

“We think there’s going to be a huge opportunity here,” CDW chairman/CEO John Edwardson said during a Sept. 18 conference call, “and we expect it to be a $1 billion business for CDW… CDW’s objective is to double Berbee’s revenue in the next five years on an organic basis alone.”

Madison, WI-based Berbee logged $390 million in sales last year. During the same period CDW posted revenue of $6.29 billion and net income of $272.1 million.

Berbee relies primarily on a field sales force working out of 11 branch offices throughout the Midwest. It employs approximately 800 people. Founded in 1993, the company provides IT products and services primarily across the Cisco, IBM, and Microsoft platforms. Berbee’s top three executive officers, including CEO Paul S. Shain, have agreed to remain with and lead the business. Berbee will operate as a separate strategic business unit of CDW with its current product and service offerings, staffing, operations, and locations.

Edwardson said about two-thirds of Berbee’s customers are not yet CDW customers, and the companies’ complementary offerings will create significant cross-selling opportunities. “Berbee is one of the nation’s biggest independent IT solutions providers,” he said. “Our vision is to become the world’s biggest and best direct technology provider. In this competitive industry, customers increasingly want to leverage IT to enhance their business performance. They want easy access to core technology and more advanced solutions.”

Founded in 1984, Vernon Hills, IL-based CDW employs approximately 4,450 people. A key initiative for CDW this year, Edwardson said during the teleconference, is to “organize and grow our services business to increasingly meet this customer demand for a single-source solution.”