Filing Flows › PC Connection (CNXN) › Takeover & LBO
Is PC Connection (CNXN) a takeover target?
A leveraged buyout at today's price plus 30% ($112.88 a share) would return about 2% a year to a private-equity buyer over 5 years; no price, however low, gets a buyer to 20%. Historically 4.2% of companies with its figures were bought within a year (0.84× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $112.88 | today's $86.83 plus 30% |
| × shares | 25.4 million | |
| = Equity value | $2.9B | |
| + Debt refinanced | $0 | |
| − Cash | $343M | |
| = Enterprise value | $2.5B | 18.2× EBITDA of $139M |
| Fees | $50.6M | 2% of the price |
| New debt | $764M | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $1.8B | 70% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $3.4B | $150M | $58.4M | $36.3M | $727M |
| Year 2 | $3.6B | $160M | $55.6M | $47.6M | $680M |
| Year 3 | $3.8B | $169M | $52.0M | $59.4M | $620M |
| Year 4 | $4.0B | $176M | $47.5M | $71.4M | $549M |
| Year 5 | $4.1B | $181M | $42.0M | $83.4M | $465M |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 13.4× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $2.4B | |
| − Debt left | $465M | |
| = Buyer's equity | $2.0B | |
| Money multiple | 1.09× | on $1.8B put in |
| Buyer's yearly return (IRR) | 1.7% |
Price against return
What the buyer makes at other premiums over today's $86.83.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $95.51 | 7.6% |
| 20% | $104.20 | 4.4% |
| 30% | $112.88 | 1.7% |
| 40% | $121.56 | −0.7% |
| 50% | $130.25 | −2.7% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $3.2B | |
| EBITDA, last 12 months | $139M | 4.4% of revenue |
| Depreciation and amortization | $11.0M | |
| Capital spending | $8.2M | |
| Debt | $0 | |
| Cash | $343M | |
| Share price | $86.83 | on Oct 30, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 8.0% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 27% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers in its sector paid a median premium of 40% over the share price before the deal (the middle half 14.7% to 60.2%), according to the 20 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, PC Connection would cost about $121.56 a share, $3.1B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 14.7% | $99.59 | $2.5B |
| Median | 40% | $121.56 | $3.1B |
| High end (a quarter paid more) | 60.2% | $139.10 | $3.5B |
The odds, from history
Historically 4.2% of companies with its figures were bought within a year (0.84× the average). Its figures put it in decile 4 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
PC Connection's latest quarter
PC Connection, Q3 2026: revenue $874M (+23% year over year), operating margin 4.7%, net earnings $31.5M, operating cash flow $9.7M. The chart follows the revenue to costs, profit and cash.
Questions
Is PC Connection being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy PC Connection?
A leveraged buyout at today's price plus 30% ($112.88 a share) would return about 2% a year to a private-equity buyer over 5 years; no price, however low, gets a buyer to 20%.
What would a takeover of PC Connection cost?
Takeovers in its sector paid a median premium of 40% over the share price before the deal (the middle half 14.7% to 60.2%), according to the 20 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, PC Connection would cost about $121.56 a share, $3.1B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.