Converge Technology Solutions Welcomes Acquisition by H.I.G. Capital
Overview of the Acquisition
Converge Technology Solutions Corp. has signed a pivotal arrangement with H.I.G. Capital in an all-cash deal that provides shareholders with C$5.50 per share, marking a significant premium over the recent trading prices. This strategic move allows immediate liquidity for shareholders and shapes Converge into a promising partner for executing its long-term growth strategy.
Key Transaction Details
The board of Converge has unanimously determined that the acquisition stands as fair and in the company’s best interests. A substantial 24% of shareholders have already agreed to support this transaction, indicating strong backing for the alignment with H.I.G. Capital. The enterprise value of the deal is estimated at around C$1.3 billion, reflecting the robust stance of Converge in the market.
Transitioning to H.I.G.
Post-acquisition, Converge will join the H.I.G. owned Mainline Information Systems, LLC, thus expanding the services offered to clients. Mainline specializes in various comprehensive IT solutions, including cybersecurity and hybrid cloud strategies. The integration of Converge and Mainline will yield a more extensive suite of capabilities, allowing both entities to serve their customers better with innovative IT solutions.
Company Leadership and Future Prospects
Upon the completion of the acquisition, Converge's CEO, Greg Berard, will oversee the new entity, complemented by Mainline's President and CEO, Jeff Dobbelaere, as president. Their unified leadership is poised to capitalize on market trends and strengthen operational efficiencies in this new chapter.
Interview Insights
Aaron Tolson, Managing Director at H.I.G. Capital, emphasized the unique position of Converge in understanding technology trends. Both entities aim to enhance their offerings, particularly in core data center infrastructure and cybersecurity solutions, working cohesively to deliver unmatched value to customers.
Expert Opinions on the Transaction
Greg Berard expressed pride in joining forces with H.I.G. Capital, identifying this partnership as a pathway to create market-leading solutions that will adapt to the evolving landscape of technology. This acquisition sets the stage for both entities to pioneer innovative strategies that pave the way for substantial growth.
Essential Financial Figures
Converge plans to announce its preliminary Q4 FY2024 results shortly, with expectations of gross profit reaching between $165 million to $178 million, underlining the company's strong financial health leading into this significant transaction.
Next Steps for Shareholders
The transaction was advised by reputable financial and legal advisors, and the process adhered to stringent practices, including a special committee’s oversight for fairness. A special meeting will enable the shareholders to vote on this transformative transaction, which demonstrates the company’s commitment to maintaining transparency and maximizing shareholder value throughout this process.
About Converge Technology Solutions
Converge Technology Solutions Corp. is revolutionizing how businesses perceive IT through its comprehensive, people-driven approach. They offer outcome-focused solutions that solve human-centered challenges with deep expertise in IT and cloud services, promoting innovation and operational efficiency.
About H.I.G. Capital
H.I.G. Capital is a preeminent global investment firm managing approximately $67 billion in capital. Headquartered in Miami with numerous offices across the United States and internationally, H.I.G. specializes in financing middle-market companies through flexible debt and equity solutions.
About Mainline Information Systems
Mainline is well-recognized for its IT solutions, consulting about cybersecurity, modern infrastructures, and managed services that drive business efficiencies. This collaboration is expected to enhance solutions for clients across various sectors.
Frequently Asked Questions
What is the acquisition price per share for Converge shareholders?
Shareholders will receive C$5.50 per share, representing a premium over market value.
When will the acquisition be completed?
The acquisition is expected to complete by the second quarter of the following year, pending approvals.
What changes will occur in management after the acquisition?
Greg Berard will be CEO of the combined entity, supported by Jeff Dobbelaere as president.
How will this acquisition benefit Converge's customers?
The merger will allow for a broader range of services, enhancing value offered to customers in IT solutions.
What happens to the stock of Converge after the acquisition?
Converge intends to delist its common shares from public markets once the acquisition is completed.
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