CDW Shares Rise on Private Equity Buyout Report

Tuesday, 29 May 2007 | 4:56 PM ET

Shares of CDWrose Tuesday following a report that the computer technology retailer may be a takeover target from private equity firms.

Private equity firms are in talks for a buyout of CDW, which has a market capitalization of about $6 billion, The Wall Street Journal said on Tuesday, citing unnamed sources. Madison Dearborn Partners is considered in the lead to buy CDW.

The talks are at a sensitive stage and could fall apart, the paper said, adding that the buyout firm might also face some late competition.

CDW, based in Vernon Hill, Ill., and Madison Dearborn were not immediately available for comment.

CDW, which mainly sells to government agencies and businesses through a Web-based catalog, last month posted a 24.5% rise in first-quarter net income, buoyed by higher sales of notebook computers, storage equipment, software and video-related equipment.

The results came after the company had expanded its distribution capacity, reorganized its sales force and entered a new market -- selling complex computer systems customized for each client -- in a bid to boost sales.

Shares of CDW are only up about 7% this year. However, shares of the company have already climbed about 28% since early March.

CDW competes against companies like Insight Enterprises and Dell.

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