CDW Plans Huge Canadian Expansion With Scalar Decisions Buy

CDW, one of the IT industry's largest solution providers, is planning a major increase in size and scale with the acquisition of Scalar Decisions, one of Canada's largest independent solution providers.

CDW did not discuss terms of the deal, which is expected to close some time this quarter. The Vernon Hills, Ill.-based company did say that the acquisition will have no material impact on CDW's non-GAAP earnings per share for 2019.

CDW ranks No. 5 on CRN's Solution Provider 500. Scalar Decisions ranks No. 95 on the Solution Provider 500.

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Scalar Decisions is also on the CRN Tech Elite 250 list as a solution provider with the highest level and most certifications from Amazon, Cisco Systems, Dell, Google, Hewlett Packard Enterprise, IBM, Intel, Microsoft, Salesforce, Verizon and VMware.

CDW has net sales of about $16 billion on a trailing 12-month basis as of Sept. 30, 2018.

Toronto-based Scalar Decisions brings CDW eight offices across Canada with 350 employees and annual revenue of $250 million Canadian dollars. The company's IT focuses include enterprise security, cloud and infrastructure, and it has major ServiceNow and media and entertainment practices.

The company is an AWS Advanced Consulting Partner, and works with Google Cloud and Microsoft Azure, as well as the IT industry's top security and infrastructure vendors.

CDW declined to discuss the acquisition in detail.

However, in a statement emailed to CRN, a CDW spokesperson said the company is excited about its pending Scalar acquisition because it strengthens CDW's value proposition in two ways.

"It enhances CDW Canada’s technical capabilities and expertise in areas such as professional and managed services, infrastructure, security and cloud. And it expands our geographic reach in Canada to serve our customers where they need us. Scalar is a highly complementary business to CDW Canada, and both of our companies stand out in the industry as leading technology solution providers. The addition of Scalar’s strong expertise in solving complex technical problems enhances the value we can deliver to customers," CDW said.

CDW historicaly has not been active on the acquisition front. Its most important acquisition was that of Berbee Information Networks, which transformed CDW from a company whose business primarily targeted consumers and business with direct sales of IT products into one of the world's largest full-service solution providers.

The company in 2014 also acquired a stake in Kelway, a 900-person London-based solution provider. The company acquired all of Kelway in 2015.

Prior to those acquisitions, CDW in 2003 purchased the North American assets of Micro Warehouse.

O’RYAN JOHNSON contributed to this report.