decor decor
"A business, like an automobile, has to be driven in order to get results."

-B.C. Forbes

CDW Acquires Minority Stake in Kelway for $380 Million

martinwolf Transaction Analysis

Financial Information*

  • Enterprise Value: £240 Million ($380 Million USD)
  • EV/2014 Revenue: 0.46x
  • EV/2014 EBITDA: 7.27x

Transaction Facts

  • IT Solution Provider CDW (Nasdaq:CDW) announced yesterday it had acquired 35 percent of privately-held UK-based solution provider Kelway, with the ability to acquire the remaining 65 percent by mid-2017.
  • While this transaction is CDW’s first acquisition outside of the United States, the two companies have been strategic partners for the past 18 months.
  • Financial information for the transaction was not officially disclosed, but valuations from media reports are in-line with industry valuations for solution providers as tracked by the MW Scoreboard.
Search for Growth Leads to Familiar Partner
  • Serving Cross-Border Enterprise Clients: Acquiring UK-based Kelway strengthens CDW’s ability to serve cross-border enterprise accounts, positioning the company well for future growth and providing more control, particularly as it builds its services offerings.
  • Pushing Beyond Traditional Limits: CDW has not been acquisitive in the past – its last major acquisition was of Berbee Information Networks in Sept. 2006 for $184 million. However, CDW previously had a strategic partnership with Kelway, and slowing growth in CDW’s core markets has led the company to consider converting this partnership to an outright acquisition.
  • PE Exits After Strong Growth: It was reported last year that Kelway had outgrown PE backer Core Capital. Beginning with a £5 million investment in Nov. 2006, their partnership has grown to £8.5 million while revenue grew from £45 million to £530 million in a combination of organic growth and seven acquisitions. According to media reports, Core Capital is receiving a significant payout of £76 million ($120M) in exchange for its 29 percent equity stake.
  • CDW Sees Opportunity to Remain on Top: CDW has remained at the top of its peer group since it held its IPO in June 2013. By acquiring a longtime partner, and completing the acquisition in stages rather than buying Kelway outright, CDW is opting for a high-potential expansion while reducing integration risk.

For more information, view the press release by clicking heremartinwolf was not the advisor in this transaction.

*Financial information was not disclosed publicly, but media reports citing persons familiar with the matter provided the figures included above.

previous post Back to Articles next post

02 Aug 2021

TowerBrook Capital Partners Makes Strategic Investment in EisnerAmper LLP

Transaction Details TowerBrook Capital Partners, an international investment management firm, has made a strategic investment in EisnerAmper, one of the largest professional services firms in the world, offering premier accounting, tax and business advisory services. The firm will now operate two divisions: EisnerAmper LLP, a licensed CPA firm, will provide attest services; and Eisner Advisory Group LLC,...

16 Jul 2021

Platinum Equity Acquires Ingram Micro

*Financial Information ($USD) Enterprise Value:         $7.2 Billion EV/FY20 Revenue:      0.15x Transaction Details Platinum Equity announced that it has completed the acquisition of Ingram Micro Inc. from HNA Group. Ingram Micro’s total enterprise value in the transaction was $7.2 billion, including $5.9 billion in equity value Ingram will retain CEO Alain Monié and...

13 May 2021

NWN Corp. Acquires Carousel Industries

Financial Information ($USD) Not Disclosed Transaction Details NWN Corporation, a leading Cloud Communications Service Provider (CCSP), announced yesterday that it will acquire fellow solutions provider Carousel Industries. Financial terms of the deal were not disclosed. New State Capital Partners, majority stakeholder of NWN since 2015, is backing the transaction which will form a combined company...