CDW aims to expand services, acquires Sirius Computer Solutions for $2.5 billion
Tech Earnings
CDW said that it will acquire Sirius Computer Solutions in a $2.5 billion deal that will bolster the company's ability to integrate technology systems and offer services.
CDW is best known as a business technology retailer, and the Sirius Computer Solutions acquisitions enables it to sell integrated systems for mid-sized and large companies. The company is acquiring Sirius Computer Solutions from private equity firm Clayton, Dubilier & Rice.
According to CDW, the combined company would have had 2020 net sales of $20.5 billion. The purchase is also expected to boost CDW's non-GAAP earnings.
Sirius Computer Solutions has 3,900 customers and offers services and integration for hybrid cloud, security, data, and managed services.
In a presentation, CDW CEO Christine Leahy said Sirius will give the company the tools to accelerate growth and tackle more complex technology projects. She also said that Sirius Computer Solutions will expand CDW's services business by 45% from about $900 million in annual sales to $1.3 billion.
The purchase is expected to close in December, and CDW is paying cash. When the acquisition is complete, CDW's net leverage ratio will be about 3.3x, but the company said it will cut its debt to a leverage ratio of 2.5x to 3x by the end of 2022.