Converge Technology Solutions announced it has entered into an arrangement agreement with an affiliate of H.I.G. Capital, under which H.I.G. has agreed to acquire all of the company’s issued and outstanding common shares.
Under the terms of the arrangement agreement, shareholders will receive C$5.50 per common share in cash, other than common shares held by certain shareholders who enter into rollover equity agreements. The purchase price of the transaction values Converge at an enterprise value of approximately C$1.3 billion. Upon completion of the deal, the company plans to apply to delist the Common Shares from all public markets and cease to be a reporting issuer under Canadian securities laws.
As a result of the deal, Converge will join the current H.I.G.-owned entity, Mainline Information Systems. Based in Tallahassee, FL, Mainline is a diversified IT solutions provider specializing in enterprise server, hybrid cloud, cyber storage, and network & security solutions, along with providing associated professional and managed services.
Converge and Mainline provide complementary products and services, and their joining will permit the combined companies to better serve customers with a broader and more diverse variety of solutions in areas like cybersecurity, cloud, and digital infrastructure. And the combined business will be led by a proven management team that reflects the strengths and capabilities of both organizations. Following the deal’s closing, Converge Chief Executive Officer Greg Berard will serve as Chief Executive Officer of the combined business, and Mainline President and Chief Executive Officer Jeff Dobbelaere will serve as President.
This arrangement agreement is the result of a comprehensive and competitive negotiation process that was undertaken at arm’s length with the oversight and participation of the Special Committee. Highly qualified legal and financial advisors advised the company and the Special Committee, and the process resulted in terms and conditions that are reasonable in the judgement of the Special Committee and the Board.
Canaccord Genuity is acting as lead financial advisor to the company and its Board. And Houlihan Lokey Capital is engaged as financial advisor to the Special Committee. And Origin Merchant Partners was engaged as an independent financial advisor and provided a fairness opinion to the Special Committee. Goodmans is acting as legal counsel to the company.
Weil, Gotshal & Manges and Stikeman Elliott are acting as legal advisors to H.I.G.
KEY QUOTES:
“Converge stands out as an organization that understands where technology trends are going in the IT market and has aligned its business accordingly, and it has a proven reputation as a trusted advisor to its customers. We are excited to combine Converge with H.I.G.-owned Mainline, a company that has advised IT decision-makers in handling their most mission-critical workloads for decades. The combined company will bring a breadth and depth of technology and services capabilities to its customers and OEM partners that is differentiated in the areas of core data center infrastructure, networking, security, and hybrid cloud.”
- Aaron Tolson, Managing Director at H.I.G. Capital
“Converge is proud to begin a new chapter alongside H.I.G. Capital. This partnership not only ensures meaningful value for our shareholders but also lays the foundation to enhance how we serve our customers. As technology continues to reshape industries worldwide, delivering comprehensive and forward-thinking solutions is vital to helping our clients succeed. We’re excited to continue leading the way as a transformative force in the IT industry.”
- Greg Berard, Chief Executive Officer of Converge
“We are excited to be joining forces with Converge as we enter the next phase in our growth journey. Our specialization in hybrid cloud, on-premises infrastructure, cybersecurity, and software solutions complements Converge’s established expertise. Together, we’re poised to create meaningful growth opportunities for our employees and enhance the value we deliver to customers, leveraging our combined capabilities to expand our service offerings and provide sought after solutions in the marketplace.”
- Jeff Dobbelaere, President and Chief Executive Officer of Mainline
