CDW To Buy Berbee Information Networks

With the acquisition, CDW dramatically enhances its enterprise-level services and solutions offerings, according to John Edwardson, chairman and CEO of the Vernon Hills, Ill.-based solution provider.

"Our customers' IT challenges are increasingly complex. Customers want easy access to technology solutions," Edwardson said in a statement. "We are committed to being the best-in-class, single source for both core technology needs and now, with this acquisition, more advanced IT services and solutions."

Berbee's annual revenue for the 12 months ended July 31 was $390 million, and it earned $22 million during that period, before interest, taxes, depreciation and amortization, according to CDW. The acquisition is expected to close by the end of October.

Founded in 1993, Madison, Wisc.-based Berbee has expertise in network infrastructure and unified communications, systems and storage, security, productivity applications and managed services. The solution provider has had double-digit sales growth for the last five years and has received awards from Cisco Systems, IBM and Microsoft in the last two years.

Though CDW relies heavily on an inside sales team, Berbee has a field sales force of 300 billable engineers. CDW plans to leverage those resources and build a nationwide field-sales force of higher-end services and solutions experts, according to Edwardson.

"Initially, CDW customers in Wisconsin, Illinois, Minnesota, Michigan, Indiana and Ohio will benefit from gaining access to one of the nation's finest IT engineering teams," he said in the statement. "In addition to the near-term advantages of this transaction, we are also excited about the opportunities to scale Berbee's business processes and methodology into geographic regions beyond the Midwest. Our financial, customer and organizational resources support this platform for future growth."

About two-thirds of Berbee's current customers aren't CDW customers, according to the company.

One VAR, who requested anonymity, said CDW will be challenged to integrate a much different business model like Berbee's.

"I think CDW is going to have a hard time adapting to the longer sales cycle associated with complex enterprise solutions," the VAR said. "This is a dramatically different business than [price] quote [on a hot product] in the morning and close [the sale] in the afternoon. As a competitor of theirs, I hope they take the eye off their core reselling business, which is flat."

Berbee will operate as a separate business unit of CDW with its current product and service offerings, management team, staffing, operations and locations. Berbee's top three executives, including CEO Paul Shain, will remain with and lead the business.

"Industry consolidation will increasingly reshape the solution provider marketplace. We're fortunate to be able to partner with an industry leader that is financially strong and shares our commitment to advanced technology, extraordinary customer service and similar cultural values," Shain said in a statement. "We're confident that CDW is the right partner for the Berbee team."

Berbee has 800 employees in 11 offices and two data centers in six Midwestern states. CDW's goal is to double Berbee's revenue in five years on an organic basis, according to Edwardson.

"It's very gratifying to know that as Berbee moves onto an increasingly national stage, it will have a premier industry partner with the resources, cultural values and commitment to support its growth as a leading national solutions provider," Berbee Chairman and Founder James Berbee said in a statement.