By Brian E. Clark
WisBusiness.com
MADISON – Berbee Information Networks – which started 13 years ago in a Madison basement – will be sold to CDW Corp. of suburban Chicago for $175 million in cash.
CDW announced this morning it has signed a “definitive agreement” to acquire privately-held Berbee, which is on the nation’s largest independent IT solutions providers. The deal is expected to close by the end of October.
Berbee CEO Paul Shain said Berbee’s headquarters will not move from Madison. Shain said he will stay on and run the Berbee unit inside CDW.
Tom Still, president of the Wisconsin Technology Council, called the sale good news for the state.
“It sends a strong message about our business environment that people want to invest here,” he said. “And it is great that Berbee’s headquarters will stay in Madison.”
Still said he believes the aquisition means other IT firms in Wisconsin will benefit from increased opportunities.
“This is a way for IT companies and suppliers to connect to a global company,” he said.
“Finally, this sale to a public company creates a lot of wealth that I hope will be pumped back into our area,” he said. “That has happened over and over again in places like Minneapolis. It helps create new companies and new jobs.”
Berbee has more than 700 employees in six Midwestern states and earned $390 million during the last fiscal year. CDW is much larger, with nearly 4,500 employees and $6.3 billion in sales.
Jim Berbee, a former IBM systems engineer who now serves as the company’s chairman, was unavailable for comment.
But in a statement, he said “It’s very gratifying to know that as Berbee moves onto an increasingly national stage it will have a premier industry partner with the resources, cultural values and commitment to support its growth as a leading national solutions provider.
“I want to thank the Berbee staff members for their dedication and hard work in consistently exceeding our customers’ expectations, building the premier IT solutions provider in the nation and making this combination possible. They have a bright future with CDW.”
Though it was not a deal-killer, Shain said he is pleased that CDW has said the company’s headquarters will stay in Madison and that it will not close any of Berbee’s satellite offices.
“We are hoping this union will build Berbee and give us a national presence. We have Wisconsin pretty well covered.
“This was a strategic decision on our part,” he said. “There was no pressure to do this. We were looking for the right partner and we found that in CDW.”
He declined to say what percentage of the company Jim Berbee owns or who are the firm’s other major investors.
But he did confirm that Berbee hopes to go to medical school and become a doctor. He has a bachelor’s degree in mechanical engineering, a master’s degree in mechanical engineering, and an MBA in finance from UW-Madison. He is also a four-time Ironman triathlete and a multi-engine pilot.
He serves on the board of directors of the UW-Madison Foundation, the United Way of Dane County and the Thomson Plumb Trust Co. Shain said Jim Berbee will have no position with the company after the sale.
“But I’m sure he will be busy,” Shain said.
For CDW, the deal means it will more than double its IT solutions staff. CDW has 250 technology specialists, while Berbee has 300 billable engineers.
In a statement, CDW said the aquistion will enhance its offerings of advanced technology products and services to address customers’ more complex business requirements.
“Our customers’ IT challenges are increasingly complex – customers want easy access to technology solutions,” said John A. Edwardson, CDW chairman and chief executive officer. “We are committed to being the best-in-class, single source for both core technology needs – and now with this acquisition, more advanced IT services and solutions.”
