#Canada #H.I.G. Capital #Toronto #Converge Technology #Mainline

H.I.G. Capital's Acquisition of Converge Technology Solutions

On February 8, 2025, Converge Technology Solutions Corp. announced a landmark acquisition by H.I.G. Capital, marking a significant moment for both companies in the technology sector. This acquisition is notable for its all-cash nature, which promises immediate liquidity for Converge’s shareholders, ensuring they receive CAD 5.50 per share. This transaction not only reflects a 56% premium over the last closing price prior to the announcement but also positions H.I.G. Capital as a strategic partner to further Converge's long-term growth strategy.

The Deal Details

The deal values Converge at approximately CAD 1.3 billion, and will result in the completion of the transaction by the second quarter of 2025, subject to necessary regulatory and shareholder approvals. Shareholders collectively holding 24% of the outstanding shares have already signed agreements to support the transaction, indicating strong backing for this strategic shift.

H.I.G. Capital's acquisition reflects a deeper commitment to enhancing IT solutions capabilities. Following the closing, Converge will merge with Mainline Information Systems, a subsidiary of H.I.G. Capital. Mainline is recognized for its expertise in hybrid cloud solutions, cybersecurity, and network infrastructure, making this integration particularly beneficial.

Strategic Growth

As the two companies combine forces, the goal is to leverage their complementary service offerings and provide a broader range of solutions to clients, particularly in critical areas such as cybersecurity and cloud infrastructure. According to Greg Berard, CEO of Converge, this partnership not only brings significant value to shareholders but also lays the groundwork for a broader, more effective service provision to customers in a rapidly evolving technology landscape.

Aaron Tolson, the Managing Director of H.I.G. Capital, expressed enthusiasm about the acquisition, highlighting Converge’s reputation for understanding IT market trends and its ability to deliver client-focused solutions. The merger aims to create a tech powerhouse that can address complex challenges faced by businesses today.

Leadership Transition

Post-acquisition, Greg Berard will serve as CEO of the combined entity, while Jeff Dobbelaere, current CEO of Mainline, will take the role of Chairman. This leadership transition reflects a blending of expertise from both firms, aiming to drive innovation and operational excellence in services provided to clients.

H.I.G. Capital has a strong history in enhancing business value through strategic acquisitions, and the integration with Converge is expected to mirror this successful approach. Both companies believe that cultivating a substantial base of clients and enhancing service offerings will be critical to their success in meeting the technological needs of their clientele.

Looking Ahead

As both companies prepare for this transition, they are poised to deliver enhanced capabilities and services that leverage the strengths of their extended resources. This acquisition forms part of a broader narrative in the tech industry, where consolidation often leads to increased innovation and improved customer experiences.

Investors are keen to see the end-of-quarter financial results slated for release on February 10, 2025, where expectations are high for solid earnings and adjusted EBITDA figures, substantiating the optimism surrounding this merger.

In conclusion, the acquisition of Converge by H.I.G. Capital signals a transformative step in the tech industry, setting the stage for a collaborative future built on shared expertise and innovative solutions. Clients and stakeholders alike look forward to the enhanced offerings that this strategic alliance will bring.