Converge Technology Solutions and H.I.G. Capital Update Agreement for Acquisition Deal

Converge Technology Solutions and H.I.G. Capital Update their Arrangement Agreement

On April 3, 2025, Converge Technology Solutions Corp. (TSX: CTS, FSE: 0ZB, OTCQX: CTSDF) revealed an important update regarding its arrangement agreement with H.I.G. Capital. The update signifies a shift in conditions whereby H.I.G. has agreed to acquire all issued and outstanding common shares of Converge for a now enhanced cash payment of CAD 6.00 per share. This amount reflects an increase from the previously announced CAD 5.50 per share. However, this adjustment excludes shares held by specific shareholders who are participating in rollover equity agreements.

The backdrop of this agreement shifts with the history of unsolicited offers that Converge received. On March 7, 2025, a credible third party submitted a conditional and non-binding offer to purchase 100% of the common shares at CAD 6.00 each. In light of their fiduciary duties, Converge's board, in consultation with their legal and financial advisors, meticulously examined this unsolicited offer and concluded that it constituted a bona fide acquisition proposal that could potentially surpass the standing offer from H.I.G.

This examination led to legal proceedings initiated by H.I.G. in the Ontario Superior Court, asserting that Converge had breached conditions set out in their original arrangement by courting the third party. However, Converge refuted these claims, defending its stance vigorously.

On March 31, 2025, Converge received a formal offer from the same third party at CAD 6.00 per share. Consequently, H.I.G. indicated its willingness to amend the agreement to elevate the cash price to align with that of the competing offer. The dynamics shifted once again when the third party filed an updated binding proposal that raised the price to CAD 6.10 per share, prompting further careful consideration from Converge’s board.

Given the revised offers and the tumultuous nature of the negotiations, Converge’s board unanimously, barring one interested director, supported the amendment to finalize the agreement with H.I.G. They highlighted several points guiding their decision:
1. The amendment promises shareholders a solid assurance of a successful transaction within a short timeframe, under conditions favorable compared to the original offer.
2. The strategic advantage of securing a transaction at a competitive price would ultimately benefit the broader stakeholder community of Converge, comprising employees, customers, and suppliers alike.

Moreover, both parties agreed to terminate prior legal disputes associated with the agreement, facilitating smoother proceedings ahead. The shareholders meeting to vote on the arrangement resolution is scheduled for April 10, 2025. This extraordinary meeting will take place virtually, allowing shareholders who were on record by March 10 to participate. Completion of the arrangement is projected to occur around April 17, 2025.

Converge Technology Solutions is committed to reshaping the IT landscape, focusing on outcome-driven solutions that tackle individuals' challenges. Established in 2017, they prioritize connecting advanced analytics, artificial intelligence, cybersecurity, and cloud solutions to foster innovation across diverse industries. By employing their AIM method—Advise, Implement, Manage—they ensure tailored solutions that seamlessly integrate with existing systems without unnecessary complexity. Experience IT revolutionized with Converge, where innovation meets humanity.

This press release also serves as a note to stakeholders that the information forms part of forward-looking statements contingent on several risks and uncertainties. Therefore, reliance on the provided information should be approached with caution. The management reserves the right to amend forecasts and statements relating to the arrangement as necessary, ensuring alignment with prevailing market and corporate conditions.

For more details, Converge encourages contacting them directly or visiting their website at convergetp.com for comprehensive updates.