CDW reveals it coughed up $87m for slice of Kelway

US reseller claims to be 'off to a great start' with UK VAR

US reseller giant CDW has revealed it splashed out $86.8m (£56.52m) for its share in Kelway, adding the pair are "off to a great start".

Last November, the US firm bought a 35 per cent stake in Kelway for a then-undisclosed sum as the latter set out plans to smash the £1bn sales barrier.

But on an earnings call transcribed by Seeking Alpha this week, CDW said the price for the minority stake set it back $86.8m including fees and expenses.

As part of the deal, CDW was granted the right – but not the obligation – to acquire up to 100 per cent ownership of Kelway.

CDW's chief financial officer Ann Ziegler said on the call that the price it paid last year would not necessarily reflect the price of any future transactions.

"The price we paid in November reflected Kelway's capital structure at that time," she said.

"Given this and the fact that Kelway's leverage may change should we move ahead with our call option, the $86.8m we paid for the 35 per cent stake will not be directly comparable to the price we would pay for the remaining stake, which would likely be higher due to improving performance and debt paydown.

"The option to repurchase the remaining stake in Kelway runs from June 2015 to June 2017. We continue to expect Kelway to be slightly accretive to earnings this year."

CDW's chief executive Tom Richards added: "We're off to a great start with Kelway."

For the three months to 31 December, net income at CDW rose 13.8 per cent year on year to $51.8m on net sales which were up 12.4 per cent to $3.05bn over the same period.

For the full year, its net income rocketed 84.4 per cent annually to $244.9m on net sales which jumped 12.1 per cent to $12.07bn.