CDW's $2.5 Billion Sirius Acquisition: Strategic Play to Dominate Enterprise IT Solutions

CDW Corporation has inked a definitive agreement to acquire Sirius Computer Solutions for $2.5 billion in cash, marking a bold move to reshape its market position in the enterprise technology solutions space. The deal, backed by committed financing, is slated to close in December 2021 following regulatory clearances.

The Scale of the Combined Entity

Once the merger closes, the consolidated company would have generated approximately $20.5 billion in 2020 net sales. This acquisition isn’t just about adding headcount—it’s about plugging strategic capability gaps. Sirius brought 2,600 employees and $2.04 billion in 2020 revenues to the table, operating as one of the largest IT solutions integrators in the U.S. with roughly 3,900 large and mid-sized customers.

Expanding the Services Portfolio

Here’s where things get interesting for CDW’s bottom line. The transaction will meaningfully expand CDW’s services business by approximately 45%, growing from roughly $900 million in annual net sales in 2020 to approximately $1.3 billion in combined revenue. This shift toward a more balanced portfolio—anchored by services rather than pure hardware distribution—addresses a long-standing market demand for integrated, consultative IT solutions.

Sirius brings specialized capabilities across several high-growth domains: hybrid infrastructure solutions, cybersecurity, digital transformation initiatives, cloud migration, and managed services. These are precisely the areas where enterprise customers are prioritizing investment.

Immediate Financial Accretion

CDW projects the deal will immediately boost its gross margin by approximately 110 basis points and non-GAAP operating income (NGOI) margin by 20 basis points on a combined 2020 basis. The acquisition would have contributed $0.62 to non-GAAP earnings per diluted share using 2020 pro forma figures.

The Integration Thesis

Both companies emphasize cultural alignment as foundational to success. CDW and Sirius share a customer-centric operating philosophy and performance-driven culture, theoretically reducing integration friction. CDW’s leadership outlined a three-pronged growth strategy: broadening its solutions portfolio, deepening customer relationships, and delivering comprehensive technology lifecycle management.

The combined entity is targeting an initial net leverage ratio of approximately 3.3x upon closing, with plans to deleverage toward the 2.5x to 3.0x range by end of 2022—demonstrating disciplined capital allocation even amid significant debt issuance.

Market Context

The deal signals CDW’s strategic recognition that enterprise customers increasingly demand integrated solutions rather than point products. By acquiring Sirius’ services-led architecture and technical expertise, CDW positions itself to compete more effectively against other full-stack solution providers while maintaining its traditional strengths in multi-brand distribution and scale.