CDW units mark end of withdrawal rights for 11%, toggle notes tender

By Susanna Moon

Chicago, April 7 - CDW Corp. said that withdrawal rights expired for the tender offer made by its subsidiaries CDW LLC and CDW Finance Corp. for up to $665,138,000 principal amount of their $890 million of 11% senior exchange notes due 2015 and $316,974,000 of 11½%/12¼% senior PIK election exchange notes due 2015.

Holders may no longer withdraw tendered notes as of 5 p.m. ET on April 5.

The offer has been oversubscribed, and the notes will be purchased on a prorated basis.

CDW announced a cap on March 30 for the offer and canceled the consent solicitation for the notes. Before that, the companies were offering to purchase any and all notes tendered.

As previously noted, the companies received enough consents to eliminate substantially all of the restrictive covenants and some events of default in the indenture. A supplemental indenture had been executed but will not become operative.

All holders who tender will receive $1,090 per $1,000 principal amount of notes. Originally, holders who tendered after 5 p.m. ET on March 7, the consent date, would have received $1,060 per $1,000 principal amount of notes.

The issuers will also pay accrued interest up to but excluding the payment date.

The tender offer began on Feb. 23 and will end at 8 a.m. ET on April 12, extended from March 31 and, prior to that, March 22.

As of 5 p.m. ET on March 28, holders had tendered $976,776,859 of notes including $759,207,000 of the 11% notes and $217,569,859 of the PIK notes.

The tender offer is subject to the consummation of a refinancing transaction yielding enough proceeds to fund it.

On March 29, CDW Escrow Corp. priced $725 million of 8½% senior notes due 2019. The proceeds will be deposited into a segregated escrow account and released to CDW LLC and CDW Finance if, as of the expiration date, at least $665,138,000 of notes have been tendered in the offer. Because withdrawal rights have expired, the company expects this condition to be satisfied.

The proceeds, together with borrowings under the companies' revolving credit facility, will then be used to fund the tender offer.

The dealer manager and solicitation agent is J.P. Morgan Securities LLC (800 245-8812 or 212 270-1200). The information agent and tender agent is D.F. King & Co., Inc. (800 290-6429 or 212 269-5550).

CDW is a Vernon Hills, Calif.-based provider of information technology solutions and services.

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