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IT solution provider and reseller CDW on Wednesday unveiled a major cut in its initial public offering price as part of its proposed public listing on the Nasdaq exchange under the ticker symbol "CDW."
CDW, in a Wednesday SEC filing, said it plans to sell 23,250,000 shares of common stock at an estimated IPO price of between $17.00 and $18.00 per share.
Before expenses, that would raise a total of between $395,250,000 and $418,500,000. Assuming a per-share price of $17.50, CDW estimated its total proceeds, after deducting underwriting discounts and commissions and estimated offering expenses, would be about $379.2 million.
However, this is a steep cut from the company's earlier prospectus, unveiled in a June 14 SEC filing, which said the company expected a per-share price of $20.00 to $23.00.
This is not CDW's first time to go public.
CDW was founded in 1984 by Michael Krasny as Computer Discount Warehouse and first became a public company in 1993. CDW in 2007 went private in a $7.4 billion deal when it was acquired by equity companies Madison Dearborn Partners and Providence Equity Partners.
In its most recent S-1 filing, CDW estimated that sales of Hewlett-Packard products accounted for about 21 percent of the company's revenue, followed by sales of Cisco products, which accounted for 13 percent. About 31 percent of its purchases come from its three primary distribution partners: Ingram Micro, Tech Data and Synnex.
HP, along with Dell and IBM, is among the manufacturers CDW also includes in a list of competitors. The company also said its competitors in the channel side include both volume resellers and value-added solution providers including Dimension Data, ePlus, Insight Enterprises, PC Connection, PCM, Presidio, Softchoice, World Wide Technology and others.
While CDW lists HP and solution providers as competitors, it does not really compete well when solution providers focus on providing value, said Dave Butler, president of Enterprise Computing Solutions, a Mission Viejo, Calif.-based solution provider and HP partner.
CDW focuses mainly on volume sales, while companies like ECS focuses on value, project-based sales, Butler said.
"If one of my reps came in and said CDW was getting a deal from us, and could we come in with a lower price, I'd tell him that that's a CDW deal," he said.