Computer retailer CDW Corp. became the latest company to be swallowed up by a private equity firm, announcing late Tuesday that it had agreed to be bought by Madison Dearborn Partners for $7.3 billion.
CDW said its board had held an auction for potential bidders before approving the Madison Dearborn deal, under which CDW shareholders will get $87.75 in cash for each share.
The price of the deal represents a premium of about 16.1% over CDW's closing share price of $75.56 on May 25, the last trading day before published reports regarding a potential transaction. Under terms of the deal, CDW's board will not declare an annual dividend in 2007, Vernon Hills, Ill.-based CDW said.
CDW's stock rose $2.06 to $85.17 on Wednesday.
Chicago-based Madison Dearborn's acquisition of CDW, which mainly sells to government agencies and businesses through a Web-based catalog, follows CDW's 24.5% rise in first-quarter net income. The better-than-expected profit was buoyed by higher sales of notebook computers, storage equipment, software and video equipment.