CDW swallows the rest of Kelway
After months of ‘will-they, won't-they' speculation, US giant acquires the remaining 65 per cent of firm
Kelway has been snapped up by CDW less than a year after it grabbed a 35 per cent stake in the London-based firm.
According to a statement by the US firm, it has paid $431m in cash and stock for Kelway before transaction fees and expenses, and will consolidate approximately $80m of net debt, in return for its 100 per cent stake in the company.
At the time, CDW revealed it was considering buying the rest of the company, but had given itself a two-year window in which to make the decision. Just two months ago it signalled it was happy with the progress Kelway was making and hinted that the two firms would be working more closely together in the future.
The firm claims the acquisition will enable CDW to strengthen its international presence and provide a more ‘consistent experience’ to both sets of customers.
No details were available on whether Kelway would change and how it would, if at all, affect current staffing levels at the firm, as this article was published.
Phil Doye, chief executive of Kelway, said: “Today’s announcement is a significant one, and is the beginning of an exciting new chapter for Kelway. “We have focused strongly on growth in both the UK and internationally over recent years, and we look forward to continuing that growth as part of CDW.”
Tom Richards, chairman and CEO of CDW, said: “Since our initial investment in Kelway last year, our two companies have worked closely together to support joint customers and partners – a relationship that has been very successful, thanks to our well-aligned cultures.
“Acquiring 100 percent of Kelway accelerates our ability to work together to meet our customers’ growing international needs and continue our path of profitable growth.”
CDW also announced its financial results for the second quarter ended 30 June 2015, with net sales in the period standing at $3.31bn, a 6.7 per cent increase on the same time last year. Net profit was $108.2m, a 25 per cent increase on the previous year.
Richards added: “Our strong topline and profitability performance in a challenging market was driven by the combines power of our balanced portfolio of channels and breadth of offerings, including our ability to bring newer, innovative technologies to our customers and the success of our three-part strategy for growth.
“This performance reinforces our confidence in our strategy and capital allocation actions, including the purchase of the remaining 65 per cent of Kelway. “We continue to target profitable growth in 2015 and organic growth 200 to 300 basis points above the US IT market,” he said.
“We remain laser-focused on execution and meeting the needs of our more than 250,000 customers in the US, Canada and now the UK.”
Stay tuned to Channelweb for further updates on this story as it develops.