- An affiliate of H.I.G. Capital has signed an agreement to acquire all issued and outstanding common shares of Converge Technology Solutions (TSX:CTS)
- This transaction values Converge at an enterprise value of approximately C$1.3 billion
- The merger of Converge and Mainline is out to enhance both of their abilities to serve customers with a broader range of solutions in areas such as cybersecurity, cloud, and digital infrastructure
- Converge Technology Solutions stock (TSX:CTS) opened trading at C$5.40
An affiliate of H.I.G. Capital has signed an agreement to acquire all issued and outstanding common shares of Converge Technology Solutions (TSX:CTS).
Converge shareholders will receive C$5.50 per share in cash, except for certain shareholders who enter into rollover equity agreements. This transaction values Converge at an enterprise value of approximately C$1.3 billion.
Once the transaction is complete, Converge intends to delist its common shares from all public markets and cease to be a reporting issuer under Canadian securities laws. The acquisition will also see Converge join Mainline Information Systems, LLC, an H.I.G.-owned entity based in Tallahassee, Florida. Mainline specializes in enterprise server, hybrid cloud, cyber storage, and network and security solutions.
The merger of Converge and Mainline is out to enhance both of their abilities to serve customers with a broader range of solutions in areas such as cybersecurity, cloud, and digital infrastructure. The combined business will be led by a management team that includes Converge CEO Greg Berard (pictured above) as chief executive officer and Mainline president and CEO Jeff Dobbelaere as president.
“Converge is proud to begin a new chapter alongside H.I.G. Capital,” CEO Berard said in a news release. “This partnership not only ensures meaningful value for our shareholders but also lays the foundation to enhance how we serve our customers. As technology continues to reshape industries worldwide, delivering comprehensive and forward-thinking solutions is vital to helping our clients succeed.”
The transaction has received unanimous approval from Converge’s Board of Directors. Shareholders will benefit from a 56 per cent and 57 per cent premium to the closing price.
Converge also announced that it will release its preliminary Q4 FY2024 results on February 10, 2025. The company expects gross profit and adjusted EBITDA for the fourth quarter to be at the high end of the previously provided ranges of C$165 – C$178 million and C$36 – C$47 million, respectively.
Converge Technology Solutions Corp. is a services-led, software-enabled, IT and cloud solutions provider focused on delivering industry-leading solutions.
Converge Technology Solutions stock (TSX:CTS) opened trading more than 50 per cent higher at C$5.40.
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(Top image: Converge Technology Solutions Corp.)
