CDW still aims to acquire solution providers to grow by about $1.5 billion in revenue through the end of 2008.
John Edwardson, chairman and CEO of CDW, said the Vernon Hills, Ill.-based direct marketer hopes to reach a run rate of $10 billion in sales by next year and will need to buy its way there.
"We never stop looking [for acquisitions]. We continue to look now. It's not always an easy thing to do to find the right company and the right fit," Edwardson said in an interview with CRN.
CDW finished 2006 with $6.79 billion in sales. "We think we can get halfway there by ourselves through organic growth. That means we will go out and buy some more revenue," Edwardson said.
CDW's acquisition last September of Berbee Information Networks, a $400 million VAR based in Madison, Wis., is complete, which would allow CDW to pick up the pursuit of other targets. CDW's strategy is to build a local services presence in multiple markets by buying VARs. Berbee serves corporate customers in six Midwestern states.
Future acquisitions likely would be integrated into Berbee, according to Edwardson. "[For services], Berbee is the platform we want to build," he said.
CDW and Berbee have closed some "good wins" around Microsoft, Edwardson added. Berbee accounted for about $100 million in revenue for CDW in the fourth quarter ended Dec. 31.
"Berbee had a huge services practice in Microsoft, but it was not a LAR," Edwardson said. "When it wanted to sell a license, they had to bring in another company to do that. We have begun to work jointly on that, and several of those were significant [in the fourth quarter]."
Earlier on Friday, Edwardson said in a conference call with financial analysts that he wasn't satisfied with CDW's performance in 2006 and expects it to improve this year.
"Our overall results were good. We could have done better, especially done better in the fourth quarter. We expected revenue growth to be stronger. Our cost structure outpaced the revenue structure [in the quarter]," Edwardson said. "There is plenty of work to do in all areas of company to fully achieve our ambitious goals. We will continue to focus on the performance of our sales organization. We're working hard to reap the benefits of our new structure. We will re-accelerate revenue and grow profitability."