#Canada #H.I.G. Capital #Toronto #Converge Technology #Acquisition Announcement

Converge Technology Solutions and H.I.G. Capital: A New Strategic Alliance

In a significant move for the tech industry, Converge Technology Solutions Corp. announced its acquisition by H.I.G. Capital in an all-cash transaction valued at approximately C$1.3 billion. This agreement promises immediate liquidity for shareholders while shaping a strategic partnership aimed at enhancing Converge's long-term growth trajectory.

Key Details of the Acquisition

Effective February 6, 2025, shareholders of Converge will receive C$5.50 for each common share they hold, which represents notable premiums of around 56% over the stock’s closing price and 57% over the 30-day volume-weighted average price on the Toronto Stock Exchange. About 24% of all outstanding shares have already been pledged in support of this transaction.

The transaction received unanimous backing from Converge's Board of Directors, who concluded that the deal is fair and in the best interests of the company. This exciting development unfolds as Converge aims to transition from a public entity to joining forces with Mainline Information Systems, LLC, another H.I.G.-owned company, thereby merging their expertise in IT solutions.

A Broader Technology Offering

Converge and Mainline specialize in complementary areas, primarily focusing on enterprise server solutions, hybrid cloud services, cybersecurity, and digital infrastructure. By combining their resources, they aim to broaden their offerings, providing clients with more comprehensive solutions in cybersecurity, cloud services, and networking.

Greg Berard, Chief Executive Officer of Converge, expressed enthusiasm about this new chapter, stating, “This partnership not only ensures meaningful value for our shareholders but also lays the foundation to enhance how we serve our customers.” H.I.G. Capital affirms their commitment to supporting the transformative innovations that drive success for businesses globally.

Management Transition

Upon completion of the acquisition, leadership will undergo a transition. Greg Berard will assume the role of President and Chief Executive Officer for the newly combined entity, while Jeff Dobbelaere, currently Mainline's President, will function as the organization’s President.

Future Expectations and Objectives

Anticipated completion of the deal is projected for the second quarter of 2025, pending necessary regulatory and shareholder approvals. Converge intends to hold a special meeting in April 2025 to secure required votes.

In conjunction with this acquisition, Converge seeks to strengthen its market position amid a rapidly evolving technology landscape. The expected Q4 FY2024 results are set for release on February 10, 2025, with projections indicating high ends of gross revenues between $165 million and $178 million, alongside adjusted EBITDA forecasts between $36 million and $47 million.

The framework of this deal not only emphasizes shareholder value but also poised positioning within the IT domain, catering to the urgent demands of cybersecurity and cloud technologies.

As technology continues to revolutionize industries, Converge, now backed by H.I.G. Capital, stands ready to leverage its combined capabilities, fulfilling a critical role as a transformative force.

Conclusion

Converge's acquisition by H.I.G. Capital marks a pivotal moment in its history, promising expanded capacities and strengthened offerings in the IT solutions sector. As they navigate this new journey, all eyes will be on their capabilities to innovate and lead in a competitive market, with the goal of driving continual value for shareholders and clients alike.