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CDW Acquiring Micro Warehouse

CDW Corp. , a major supplier of computers to state, local and federal agencies, plans to acquire the North American assets of Micro Warehouse, a Norwalk, Conn.-based reseller of computers, software and peripheral products for approximately $22 million.

According to CDW officials, it is anticipated that the U.S. transaction will be completed today. Completion of the Canadian portion of the transaction is subject to certain regulatory approvals.

The boards of directors of both companies have approved the transaction, which includes the purchase of a U.S. customer base which accounted for annualized August sales of more than $900 million, Canadian operations with trailing 12-month sales of approximately $40 million in U.S. dollars, existing inventories valued at approximately $14 million, and intellectual capital, including trademarks and copyrights.

CDW will not be acquiring either the accounts receivable or the liabilities of Micro Warehouse, but will receive compensation for collecting existing Micro Warehouse receivables for a service fee of five percent. CDW estimates that transition costs, including severance, and costs related to the transaction will total $10-$12 million, and will be incurred primarily during the fourth quarter.

Approximately 50 percent of Micro Warehouse's U.S. revenue is from corporate customers, 35 percent from the public sector, and 15 percent from consumers.