People who get IT, shop for it at CDW. The company offers about 100,000 information technology products, including notebook and desktop computers, software, printers, servers, storage devices, networking tools, and accessories, under more than 1,000 brands. Top brands include Adobe, Apple, Cisco, Hewlett-Packard, Microsoft, VMware, among others. CDW operates a retail store at its corporate headquarters and manages an e-commerce site. Almost all of the company's sales come from public-sector clients and private businesses. Founded in 1984 as Computer Discount Warehouse, today CDW is owned by private equity firms Madison Dearborn Partners and Providence Equity Partners. The company went public in mid-2013.
CDW was hoping to raise $500 million with its IPO but walked away with $395 million. The computer seller will use the proceeds to service debt, to conclude ties with its owners, and for general corporate services. The company is counting on its recent strong performance (sales are up 25% since 2008) to draw investors to its IPO. This is its second IPO after being in private hands for six years.
CDW has customers in the US and Canada.
CDW has a Toronto-based subsidiary that markets computer products to customers across Canada. CDW Advanced Services, another subsidiary, provides customized engineering services along with hosting and data center services. Together, Canada and the Advance Services business contributed about $592 million (or 6%) to CDW's total 2012 sales. With growth of overall personal-computer shipments slowing, the services business is CDW's best hope for growth.
CDW's sales topped $10 billion for the first time in 2012, a 5.5% increase versus 2011. Net income soared nearly 600% over the same period to $119 million. All of the company's product and services categories posted sales gains, with notebooks and mobile devices up 10%, and services up 12%. Sales to "Public" customers (up 7%), including government agencies and education and health care institutions, outperformed the corporate business (up 3%). Indeed, sales to health care providers was a big driver in 2012 with sales up 18% versus 2011.
The corporate sector (small, medium, and large corporations) accounted for more than 50% of net sales in 2012 while the public sector (education, government, and healthcare) accounted for around 40%.
While sales are growing, CDW is saddled with staggering debt. The company owes nearly $3.8 billion and has just about $38 million of cash on hand.
CDW was taken private in 2007 by Madison Dearborn Partners and Providence Equity Partners in a deal valued at about $7.4 billion. The two private equity firms control the company.