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CDW Readies for Buyout

Tentative agreement to sell out to private equity firm will open 30-day bidding process

CDW, one of North America's largest resellers of computer hardware and software, with a substantial stake in storage and security gear, has agreed to be bought by a Chicago-based private equity investment firm Madison Dearborn Partners LLC for $7.3 billion, or $87.75 per share.

The CDW buyout is aimed for completion in the late third quarter or early fourth quarter 2007. First, though, CDW shareholders must approve the offer. And before that, CDW, with the help of Morgan Stanley, will open a "go shop" period, soliciting bids for higher alternative proposals for 30 days.

The transaction follows a recent trend toward large companies going private, as evidenced in the recent sale of DaimlerChrysler to a private firm. Experts say exiting the public markets can help companies simplify their administrative tasks, benefit from fresh investment, and lower risks involved in public ownership.

And for now at least, private firms are also exempt from some of the burdensome compliance regulations public companies shoulder -- though that could change within a year or so. (See Audit Pins & Needles.)

CDWs founder Michael P. Krasny, who controls directly or indirectly approximately 22 percent of the outstanding shares of common stock, has agreed to vote favorably when the merger is put to shareholder vote.

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