Acquisition (Tables)

9 Months Ended

Sep. 30, 2015

A summary of the total consideration transferred is as follows:



(in millions)	Acquisition-Date Fair Value
Cash	$	291.6
Fair value of CDW common stock ⁽¹⁾	33.2
Fair value of previously held equity investment on the date of acquisition ⁽²⁾	174.9
Total consideration	$	499.7

(1)

The Company issued 1.6 million shares of CDW common stock. The fair value of the common stock was based on the closing market price on July 31, 2015, adjusted for the lack of marketability as the shares of CDW common stock issued to the sellers are subject to a three-year lock up restriction from August 1, 2015. One of the sellers issued 0.6 million stock options to certain Kelway coworkers over his shares of CDW common stock received in the transaction. The fair value of these stock options was $21.8 million, which has been accounted for as post-combination stock-based compensation and is being amortized over the weightedaverage requisite service period of 3.2 years which will be included in the line item “Selling and administrative expenses” in the Consolidated Statements of Operations.

(2)

As a result of the Company obtaining control over Kelway, the Company’s previously held 35% equity investment was remeasured to fair value, resulting in a gain of $98.1 million included in the line item “Gain on remeasurement of equity investment” in the Consolidated Statements of Operations. The fair value of the previously held equity investment was determined by management with the assistance of a third party valuation firm, based on information available at the acquisition date.

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The recognized amounts of identifiable assets acquired and liabilities assumed, translated using the foreign currency exchange rates on the date of acquisition, were as follows:



(in millions)	Acquisition-Date Fair Value⁽¹⁾
Cash	$	27.8
Accounts receivable	135.7
Merchandise inventory	20.4
Property and equipment, net	11.4
Identified intangible assets ⁽²⁾	289.8
Other assets	37.5
Total assets acquired	522.6
Accounts payable—trade	(86.1		)
Deferred revenue	(49.2		)
Other liabilities	(32.9		)
Deferred tax liabilities	(57.0		)
Debt	(111.5		)
Total liabilities assumed	(336.7		)
Total identifiable net assets	185.9

Goodwill	313.8

Total purchase price	$	499.7


(1)	The fair values assigned to the tangible and intangible assets acquired and liabilities assumed were based on management’s estimates and assumptions as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. These preliminary fair values are subject to change within the measurement period.


(2)	Details of the identified intangible assets are as follows:



(in millions)	Acquisition-Date Fair Value		Weighted-Average Amortization Period (in years)
Customer relationships	$	260.8	13
Customer contracts	25.9		3
Developed technology	1.7		2
Trade name	1.4		1
Total identified intangible assets	$	289.8

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination

Details of the identified intangible assets are as follows:



(in millions)	Acquisition-Date Fair Value		Weighted-Average Amortization Period (in years)
Customer relationships	$	260.8	13
Customer contracts	25.9		3
Developed technology	1.7		2
Trade name	1.4		1
Total identified intangible assets	$	289.8

Business Acquisition, Pro Forma Information

The unaudited pro forma consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014 were as follows:



(in millions)	Unaudited Pro Forma Information
	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Net sales	$	3,571.0	$	3,474.6	$	10,091.4	$	9,661.4
Net income	$	111.1	$	54.3	$	287.5	$	192.0