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Shares of CDW Corp. (NasdaqGS:CDWC - News) rose 9 percent early on Tuesday following a report that the computer technology retailer may be a takeover target from private equity firms.
CDW shares, which have already climbed about 28 percent since early March, rose to $84.69 in pre-open trade on Nasdaq.
Private equity firms are in talks for a buyout of CDW, which has a market capitalization of about $6 billion, The Wall Street Journal said on Tuesday, citing unnamed sources. MadisonDearborn Partners is considered in the lead to buy CDW.
The talks are at a sensitive stage and could fall apart, the paper said, adding that the buyout firm might also face some late competition.
CDW, based in Vernon Hill, Illinois, and Madison Dearborn were not immediately available for comment.
CDW, which mainly sells to government agencies and businesses through a Web-based catalog, last month posted a 24.5 percent rise in first-quarter net income, buoyed by higher sales of notebook computers, storage equipment, software and video-related equipment.
The results came after the company had expanded its distribution capacity, reorganized its sales force and entered a new market -- selling complex computer systems customized for each client -- in a bid to boost sales.
Shares of CDW are only up about 7 percent this year. However, the stock, which closed on Friday at $75.56 on Nasdaq, has jumped 28 percent since early March, compared with a 10 percent rise in the S&P 500 index (^SPX - News).
CDW competes against companies like Insight Enterprises Inc. (NasdaqGS:NSIT - News) and Dell Inc. (NasdaqGS:DELL - News)
Published by Reuters

Labels: CDWC, DELL, NSIT