Softchoice and World Wide Technology, a global technology solutions and services provider, announced that they have entered into an arrangement agreement for Softchoice to be acquired by WWT via an all-cash transaction, which values Softchoice at an enterprise value of approximately C$1.8 billion. The shareholders, including each of the directors and senior officers of Softchoice representing about 51.3% of Softchoice’s issued and outstanding common shares, have entered into voting support agreements under which such shareholders have agreed to support and to vote all shares held by them in favor of the deal.
Under the terms of the agreement, WWT (through an affiliate) will acquire all the issued and outstanding common shares of Softchoice for a price of C$24.50 per share in cash, valuing Softchoice at an EV of approximately C$1.8 billion. This price represents premiums of roughly 14%, 32% and 19%, to the closing price of the shares on the Toronto Stock Exchange (the TSX) on December 30, 2024, the closing price of the shares on the TSX on September 23, 2024, the day before the commencement of the review process, and the 90-day volume weighted average price3, respectively.
This purchase price is also above the 52-week high closing price of the common shares as of December 30, 2024. It represents a total shareholder return of approximately 62% to Softchoice’s initial public offering price of C$20.00, as adjusted for Softchoice’s historical dividend payments. Based on Softchoice’s reported financial results for the trailing 12 months to September 30, 2024, the Consideration values Softchoice at an EV to Adjusted EBITDA multiple of about 13.2x.
Following the completion of the deal, it is expected that the outstanding shares will be delisted from the TSX and that Softchoice will cease to be a reporting issuer in all applicable Canadian jurisdictions.
TD Securities is acting as the lead financial advisor to Softchoice, and RBC is acting as co-lead financial advisor to the Softchoice. And Origin is acting as an independent financial advisor to the Board of Directors. Stikeman Elliott LLP is acting as legal advisor to Softchoice.
BDT & MSD and BofA Securities are acting as financial advisors to WWT, while Blake, Cassels & Graydon and Bryan Cave Leighton Paisner are acting as legal advisors to WWT.
KEY QUOTES:
“We are excited to join WWT. Its scale and global reach, customer base of large organizations, and industry leading infrastructure solutions are a perfect complement to our software and cloud focused solutions, our Canadian presence, and our strength in the North American mid-market. We also share similar Great Place to Work certified organizational cultures, demonstrating an aligned passion for our people. I believe WWT is the ideal partner for our customers and employees and I’m excited about our future as a combined firm.”
- Andrew Caprara, Softchoice President and Chief Executive Officer
“As the AI revolution reshapes industries and transforms businesses worldwide, we are at the forefront of this change – leading by empowering enterprises of all sizes to achieve better business outcomes. Softchoice has been a transformative player in the IT industry for over 35 years, and adding its complementary software, cloud, cybersecurity and AI capabilities to WWT’s portfolio will enable us to create even greater value for our clients striving to achieve their digital transformation goals.”
- Jim Kavanaugh, WWT Co-Founder and Chief Executive Officer
“This acquisition strengthens our access to Commercial, Small and Medium business customers while expanding WWT’s position in the U.S., Canada, and around the world. Given our shared mission and Great Place to Work designations, we will continue our commitment to building a culture of innovation and inclusion to be a great place to work for all.”
- David Steward, WWT Founder and Chairman
