CDW announces tender offers for senior notes

VERNON HILLS, Ill. - CDW Corporation (NASDAQ:CDW), a Fortune 500 company and leading multi-brand IT solutions provider, has launched tender offers to purchase its outstanding 5.500% Senior Notes due December 1, 2024, and 4.125% Senior Notes due May 1, 2025. The offers are for cash, with terms outlined in the company's recent Offer to Purchase statement.

The offers are directed at notes issued by CDW LLC and CDW Finance Corporation, with an aggregate principal amount outstanding of $575 million for the 5.500% Notes and $600 million for the 4.125% Notes. The consideration for the 5.500% Notes is set at $1,000.00 per $1,000 principal amount of notes, while the price for the 4.125% Notes will be determined at a later date, not to exceed 100% of the principal amount.

Holders of the notes are entitled to withdraw tendered notes until the offers expire on Monday, August 16, 2024, at 5:00 p.m. New York City time. The settlement date is expected to be Thursday, August 22, 2024, with holders also receiving accrued and unpaid interest up to but not including the settlement date.

The tender offers are subject to certain conditions but are not contingent upon any minimum amount of notes being tendered. BofA Securities and J.P. Morgan Securities LLC are acting as Joint Dealer Managers for the tender offers. D.F. King & Co., Inc. serves as the Tender and Information Agent.

This initiative is part of CDW's capital allocation strategy and reflects its ongoing efforts to manage debt and maximize returns on technology investments for its customers across business, government, education, and healthcare sectors in the United States, the United Kingdom, and Canada.

The full terms and conditions of the tender offers are detailed in the Offer to Purchase and the related Notice of Guaranteed Delivery. These documents are available through the Tender and Information Agent and provide essential information for holders to consider before making any decisions regarding the tender offers.

This news release, based on a press release statement, is for informational purposes and is neither an offer to purchase nor a solicitation of an offer to sell any securities. The tender offers are only made by the Offer to Purchase and the related Notice of Guaranteed Delivery.

In other recent news, CDW Corporation announced stable earnings for Q2 2024 in its recent earnings call. Despite facing a challenging market, the company reported a gross profit of $1.2 billion, a figure that remained steady year-over-year. However, there was a slight dip in net sales, which fell by 3.6% to $5.4 billion compared to the previous year. The non-GAAP operating income also saw a decrease, dropping by 3.7% to $510 million.

Despite these developments, CDW is focused on growth, aiming to outpace the U.S. IT market by 200-300 basis points. The company's future plans include a continued emphasis on delivering customer value and executing strategic growth initiatives. CDW also envisions a persistent demand for client device refreshes, AI-powered assistance, and security solutions.

The company's outlook for the rest of the year anticipates the current market conditions to continue. It aims to grow 200 to 300 basis points above the U.S. IT market, which is expected to show low single-digit growth. CDW also plans to return 50% to 75% of adjusted free cash flow to shareholders in 2024. These are among the recent developments for CDW Corporation.

InvestingPro Insights

As CDW Corporation (NASDAQ:CDW) continues to manage its capital through tender offers for its senior notes, a closer look at the company's financial health and market performance offers investors a clearer picture of its current standing. CDW has shown a commitment to shareholder returns, evidenced by its track record of raising dividends for 12 consecutive years, a testament to its financial discipline and operational efficiency.

InvestingPro data reveals that CDW has a market capitalization of $28.55 billion and is trading with a Price/Earnings (P/E) ratio of 25.02, which, while indicating a premium relative to near-term earnings growth, reflects the company's stable earnings base. The company’s Price/Book ratio stands at 13.13, suggesting a higher market valuation compared to its book value. Despite a slight revenue dip of 6.43% over the last twelve months, CDW maintains a robust gross profit margin of 22.1%, underlining its ability to control costs and maintain profitability.

Two InvestingPro Tips highlight that CDW is seen as a prominent player in the Electronic Equipment, Instruments & Components industry and has maintained a strong return over the last five years. This indicates a solid industry position and a consistent performance track record, which may reassure investors of its long-term growth potential despite recent downward earnings revisions by analysts.

For those looking to delve deeper into CDW's market performance and future outlook, InvestingPro offers additional tips. There are 11 more InvestingPro Tips available, providing valuable insights for investors considering CDW's tender offer and overall investment potential. To explore these tips, visit https://www.investing.com/pro/CDW.

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