Financial Information ($USD)

• Enterprise Value: $2.5 Billion
• EV/REV: 1.23x

Transaction Details

• CDW Corporation today announced it has entered into a definitive agreement to acquire Sirius Computer Solutions, Inc from an affiliate of Clayton, Dubilier & Rice for $2.5 billion in cash.
• Sirius, a leading provider of secure, mission-critical technology-based solutions, generated 2020 net sales of $2.04 billion with approximately 3,900 large and mid-sized customers. 
• The combined company would have had 2020 net sales of $20.5 billion and the acquisition is expected to deliver gross margin, non-GAAP operating income (NGOI) margin, and non-GAAP earnings per diluted share accretion.
• The transaction is expected to close in December 2021, subject to receipt of regulatory approvals and the satisfaction of other customary closing conditions.

martinwolf Analysis

• Top Transaction: This deal brings together two of the most powerful solution providers in the United States. Illinois-based CDW, a $20 billion behemoth and No. 5 on CRN’s Solution Provider 500, adds No. 21 Sirius. The Texas-based firm reported sales of over $2 billion in 2020 and will add more than 2,600 employees to CDW’s existing 10,000-plus.
• CDW Pivot: CDW continues to pivot from being primarily a direct market reseller to a global solutions provider of enterprise and managed services. This acquisition makes CDW even more important to vendors and customers by expanding its services portfolio by approximately 45 percent. According to CDW, its services portfolio will grow from approximately $900 million annual net sales in 2020 to approximately $1.3 billion in combined annual net sales.
• ‘Serious Consolidator’: Sirius acquired Advanced Systems Group in 2020 marking the firm’s first transaction following CD&R’s majority stake acquisition in 2019. However, Sirius has a history of growth through consolidation dating back to 2014.
• Talent & Culture: Sirius President & Chief Executive Officer Joe Mertens, whom martinwolf previouslyprofiled in our Executive Perspective series, touted the firms’ shared “performance-driven, customer-focused culture” and considerable talent as two of the driving forces that brought CDW and Sirius together.
• Market Reaction: The market appears to be responding positively to the transaction. CDW’s stock price is up six percent already while trading has been 9x the average daily volume.

For more information about this transaction, click here to read the press release from CDW.

*Financial information from the press release and FactSet.

martinwolf was not the advisor in this transaction.