CDW sets terms for senior notes cash tender offer

VERNON HILLS, Ill. - CDW Corporation (NASDAQ:CDW), a leading provider of technology solutions, has announced the pricing terms of its cash tender offer for two series of outstanding senior notes. The offer includes the purchase of all 4.125% Senior Notes due 2025 and 5.500% Notes due 2024, issued by CDW LLC and CDW Finance Corporation.

Holders of the 5.500% Notes due December 1, 2024, are being offered $1,000 per $1,000 principal amount of notes tendered, while the 4.125% Notes due May 1, 2025, have a set consideration of $992.26 per $1,000 principal amount based on a fixed spread plus the yield of a corresponding Treasury Reference Security. In addition to the tender consideration, holders will receive accrued and unpaid interest up to, but excluding, the settlement date.

The tender offer is set to expire at 5:00 p.m., New York City time, today, with the option for holders to withdraw tendered notes any time prior to this deadline. The settlement is expected to occur on August 22, 2024, following the guaranteed delivery date of August 20, 2024. The offers are subject to certain conditions but do not require a minimum amount of notes to be tendered.

BofA Securities and J.P. Morgan Securities LLC are acting as Joint Dealer Managers for the tender offers. Questions regarding the tender offers can be directed to the Joint Dealer Managers or to D.F. King & Co., Inc., the Tender and Information Agent.

The tender offers are only being made through the Offer to Purchase and the related Notice of Guaranteed Delivery. They are not being made in jurisdictions where the offers would not comply with applicable securities laws. If required by law, the offers will be made by licensed brokers or dealers.

This announcement is based on a press release statement and does not constitute an offer to purchase or a solicitation of an offer to sell securities. CDW Corporation, a Fortune 500 company, provides IT solutions to various sectors and is listed on the S&P 500 Index. The company has not made any recommendations regarding the tendering of notes in response to the tender offers.

"In other recent news, CDW Corporation reported stable Q2 2024 earnings, with a gross profit of $1.2 billion, maintaining the same figure year-over-year. However, there was a slight decrease in net sales, which fell by 3.6% to $5.4 billion compared to the previous year, and a 3.7% drop in non-GAAP operating income to $510 million. The company also launched tender offers to purchase its outstanding 5.500% Senior Notes due December 1, 2024, and 4.125% Senior Notes due May 1, 2025, with an aggregate principal amount outstanding of $575 million and $600 million respectively. Despite the challenging market conditions, CDW is focused on growth, aiming to outpace the U.S. IT market by 200-300 basis points. 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) navigates its financial strategies, including the recent cash tender offer for outstanding senior notes, investors and analysts are closely monitoring the company's performance metrics and market position. CDW, recognized for its consistent dividend increases over the years, has raised its dividend for 11 consecutive years, showcasing its commitment to shareholder returns. This is a critical factor for income-focused investors considering the stability of their investments in technology solution providers.

With a market capitalization of approximately $29.76 billion, CDW is trading at a Price/Earnings (P/E) ratio of 26.97, which indicates a premium valuation relative to near-term earnings growth. This is further underscored by the company's Price/Book (P/B) ratio of 13.69 as of the last twelve months leading up to Q2 2024. Despite these high valuation multiples, CDW is a prominent player in the Electronic Equipment, Instruments & Components industry, which may justify a premium for its market position and performance consistency.

An InvestingPro Tip to consider is that CDW has been experiencing weak gross profit margins, with a margin of 22.1% over the last twelve months as of Q2 2024. This could be a point of concern for investors looking at the company's ability to manage costs and maintain profitability. For those seeking more in-depth analysis, there are 11 additional InvestingPro Tips available, which can provide further insights into CDW's financial health and market potential.

For investors considering CDW's stock, it is also worth noting that analysts have revised their earnings downwards for the upcoming period, which could impact the company's future performance. Despite these revisions, analysts predict the company will be profitable this year, as evidenced by its profitable performance over the last twelve months. Investors can access these and other valuable insights by visiting the InvestingPro platform for CDW at https://www.investing.com/pro/CDW.

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