CDW Corporation Announces Results of Tender Offers for Certain Outstanding Senior Debt Securities

Rhea-AI Summary

CDW has announced the results of its cash tender offers for outstanding 5.500% Senior Notes due 2024 and 4.125% Senior Notes due 2025. The tender offers, which expired on August 16, 2024, resulted in $391,412,000 of the 5.500% Notes and $388,687,000 of the 4.125% Notes being tendered. CDW has accepted all validly tendered Notes for purchase and expects to settle the transactions on August 22, 2024.

Additionally, CDW priced a $1,200,000,000 New Notes Offering on August 12, 2024, with the proceeds intended to fund the purchase of the tendered Notes. The company plans to close the New Notes Offering on August 22, 2024, subject to customary conditions.

Positive

• Successful tender offer with high participation rates for both 5.500% and 4.125% Senior Notes
• New $1.2 billion Notes Offering to fund the purchase of tendered Notes, potentially improving debt structure

Negative

• None.

Financial Analyst

CDW's tender offer for its outstanding senior notes demonstrates a proactive approach to debt management. With $391.4 million of 5.500% Notes and $388.7 million of 4.125% Notes tendered, the company has successfully refinanced a significant portion of its debt. This move, coupled with the new $1.2 billion notes offering, suggests CDW is taking advantage of potentially favorable interest rates to optimize its capital structure.

The high participation rate in the tender offer (68% for 5.500% Notes and 65% for 4.125% Notes) indicates investor confidence in CDW's financial strategy. This refinancing could lead to reduced interest expenses and improved cash flow, potentially enhancing shareholder value in the long term. However, investors should monitor the terms of the new notes to fully assess the impact on CDW's financial position.

Market Research Analyst

CDW's successful tender offer and new notes issuance reflect a broader trend in the tech sector of companies optimizing their debt profiles amidst changing market conditions. This financial maneuver could enhance CDW's competitive position in the IT solutions provider market by freeing up capital for strategic investments or operational improvements.

The high participation in the tender offer suggests strong investor confidence in CDW's financial health and future prospects. This positive sentiment could translate into increased investor interest and potentially support CDW's stock price. However, it's important to consider the broader economic context, including inflation trends and Fed policies, which could influence the long-term impact of this debt restructuring on CDW's financial performance and market valuation.

Legal Expert

CDW's tender offer execution appears to be in full compliance with securities regulations, as evidenced by the detailed disclosure of offer terms and results. The company's use of a guaranteed delivery procedure demonstrates a commitment to maximizing noteholder participation while adhering to legal requirements.

The explicit statement that no recommendation was made regarding the tender offer is a prudent legal stance, protecting CDW from potential claims of undue influence. Additionally, the clear delineation of jurisdictional limitations for the offer showcases strong regulatory awareness. This meticulous approach to legal compliance in financial transactions may positively impact investor perception of CDW's governance practices, potentially reducing legal and regulatory risks associated with debt management activities.

VERNON HILLS, Ill.--(BUSINESS WIRE)-- CDW Corporation (“CDW”) announced the results, as of 5:00 p.m., New York City time, on August 16, 2024 (the “Expiration Time”), of its previously announced cash tender offers for any and all of the outstanding 5.500% Senior Notes due 2024 (the “5.500% Notes”) and 4.125% Senior Notes due 2025 (the “4.125% Notes” and, together with the 5.500% Notes, the “Notes”) issued by CDW LLC and CDW Finance Corporation. The cash tender offers were announced on August 12, 2024, and were made pursuant to the Offer to Purchase and the related Notice of Guaranteed Delivery, each dated August 12, 2024 (the “Tender Offer Documents”). The following table presents the aggregate principal amount of the Notes tendered and not validly withdrawn as of the Expiration Time.

Title of Security	CUSIP	Principal Amount Outstanding	Principal Amount Tendered(1)
5.500% Notes due 2024	12513GBA6	$575,000,000	$391,412,000
4.125% Notes due 2025	12513GBE8	$600,000,000	$388,687,000

_______________

(1)

Amounts do not include the principal amount of the Notes tendered pursuant to the guaranteed delivery procedures described in the Tender Offer Documents. $1,095,000 of the Notes were tendered through the guaranteed delivery procedures, and we expect to accept such Notes for purchase upon their timely delivery.

CDW has accepted for purchase all Notes validly tendered and not validly withdrawn at or prior to the Expiration Time. Holders whose Notes have been accepted for purchase will also receive accrued and unpaid interest on the purchased Notes from, and including, the last interest payment date for such Notes up to, but excluding, the Settlement Date (as defined below). CDW also expects to accept Notes validly tendered and delivered pursuant to the guaranteed delivery procedures described in the Tender Offer Documents. The Guaranteed Delivery Date is August 20, 2024. CDW will not accept any further tenders.

The settlement date for Notes validly tendered and not validly withdrawn pursuant to the cash tender offers is expected to be August 22, 2024 (the “Settlement Date”), the second business day following the Guaranteed Delivery Date. On August 12, 2024, CDW priced an offering of $1,200,000,000 aggregate principal amount of new notes (the “New Notes Offering”). The New Notes Offering is expected to close on August 22, 2024, subject to customary closing conditions. CDW intends to use all or a portion of the net proceeds from the New Notes Offering to fund the purchase of the Notes.

BofA Securities and J.P. Morgan Securities LLC served as Joint Dealer Managers for the tender offer.

This news release is neither an offer to purchase nor a solicitation of an offer to sell any securities. The tender offers were made only by, and pursuant to the terms of, the Tender Offer Documents. The tender offers were not made in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In any jurisdiction where the laws require the tender offers to be made by a licensed broker or dealer, the tender offers were made by the Joint Dealer Managers on behalf of the Issuers. None of the Issuers, the Tender and Information Agent or the Joint Dealer Managers, nor any of their affiliates, has made any recommendation as to whether holders should tender or refrain from tendering all or any portion of their Notes in response to the tender offers.

About CDW

CDW Corporation is a leading multi-brand provider of information technology solutions to business, government, education and healthcare customers in the United States, the United Kingdom and Canada. A Fortune 500 company and member of the S&P 500 Index, CDW helps its customers to navigate an increasingly complex IT market and maximize return on their technology investments. For more information about CDW, please visit www.CDW.com.

Caution Concerning Forward-Looking Statements

Statements in this release that are not statements of historical fact are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including without limitation statements regarding the future dividends, earnings growth, capital allocation and other strategic plans of CDW. These forward-looking statements are subject to risks and uncertainties that may cause actual results or events to differ materially from those described in such statements. Although CDW believes that its plans, intentions and other expectations reflected in or suggested by such forward-looking statements are reasonable, it can give no assurance that it will achieve those plans, intentions or expectations. Reference is made to a more complete discussion of forward-looking statements and applicable risks contained under the captions "Forward-Looking Statements" and "Risk Factors" in CDW's Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent filings with the SEC. CDW undertakes no obligation to update or revise any of its forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240819419362/en/

Investor Inquiries

Steven O'Brien

Vice President, Investor Relations

(847) 968-0238

investorrelations@cdw.com

Media Inquiries

Sara Granack

Vice President, Corporate Communications

(847) 419-7411

mediarelations@cdw.com

Source: CDW Corporation

FAQ

What was the result of CDW's tender offer for its 5.500% Senior Notes due 2024?

CDW received tenders for $391,412,000 of the $575,000,000 outstanding 5.500% Senior Notes due 2024.

How much of CDW's 4.125% Senior Notes due 2025 were tendered?

CDW received tenders for $388,687,000 of the $600,000,000 outstanding 4.125% Senior Notes due 2025.

When is the settlement date for CDW's tender offers?

The settlement date for the tender offers is expected to be August 22, 2024.

What is the size of CDW's new notes offering announced alongside the tender offers?

CDW priced a new notes offering of $1,200,000,000 aggregate principal amount on August 12, 2024.