#Canada #H.I.G. Capital #Converge Technology #Mainline Information #Toronto, Gatineau

H.I.G. Capital Set to Acquire Converge Technology Solutions

In a groundbreaking transaction, H.I.G. Capital has reached an agreement to acquire Converge Technology Solutions Corp. This acquisition, valued at approximately CAD 1.3 billion, will see Converge shareholders receiving CAD 5.50 per share in cash—offering a significant premium to the market prices before the announcement. The deal represents a 56% increase over the last closing price and a 57% increase over the 30-day volume-weighted average price prior to the announcement on February 6, 2025.

The transaction has been unanimously approved by Converge’s board of directors, following the recommendation of a special committee of independent directors. This acquisition not only ensures immediate liquidity for shareholders but also provides a strategic partnership that will allow Converge to effectively implement its long-term growth strategy.

With 24% of Converge's shareholders already committing their support for the vote in favor of this deal, both parties anticipate a smooth transition as they move forward with the necessary approvals required before the transaction's completion in the second quarter of 2025.

Partnership Expands Capabilities

Once the acquisition is finalized, Converge will join H.I.G.'s existing technology entity, Mainline Information Systems based in Florida. Mainline is recognized for its diverse IT solutions including enterprise servers, hybrid cloud services, cybersecurity, and managed professional services.

Marking a synergy between the two companies, the combined resources and expertise aim to deliver a more comprehensive range of services to their clientele in areas like cybersecurity, cloud computing, and digital infrastructure.

Greg Berard, CEO of Converge, will lead the newly formed entity post-acquisition. Jeff Dobbelaere, the current president and CEO of Mainline, will serve as president. Both leaders express excitement about the potential for growth and enhanced service offerings that the merger represents.

Remarks from Leaders

Aaron Tolson, Managing Director at H.I.G. Capital, emphasizes, “Converge stands out as an organization that understands market trends in IT and has aligned its business model accordingly. This partnership with Mainline will create a robust offering that supports critical IT workloads for our clients.”

On the other hand, Berard shares his enthusiasm for this strategic move, stating, “This partnership not only delivers significant value to our shareholders but also sets the foundation to enhance customer service as we aim to deliver innovative and comprehensive solutions that empower our clients amidst the changing technology landscape.”

Financial Projections

Converge also plans to report its preliminary financial results for the fourth quarter of fiscal 2024 soon, with anticipated adjusted EBITDA ranging between CAD 36 million and CAD 47 million, suggesting a robust financial performance leading up to the acquisition.

Conclusion

This acquisition not only reshapes the operational landscape of Converge Technology Solutions but positions the combined entity for greater market reach and service variety, promising a substantial impact on the industry landscape as technology continues to evolve. The anticipated shareholder vote in April 2025 will be a significant juncture in determining the completion of this strategic transaction.