One last big deal closes out the big 2024.
On Tuesday, St. Louis-based technology services company World Wide Technology (WWT); was announced. It has agreed to buy Canadian IT provider Softchoice in a deal valued at C$1.8 billion (~$1.25 billion).
The all-cash deal was unanimously approved by Softchoice's board, but the company's shareholders have yet to vote. It also applies to court approval and customary closing conditions. The companies expect to complete in late Q1 or early Q2 of 2025.
If not, Softchoice can tie up a C$49 million (~$34 million) termination fee. But its board retains the right to consider other offers.
In a statement, WWT co-founder and CEO Jim Kavanaugh said Softchoice's software; cloud The cybersecurity and AI capabilities will complement WWT's existing product portfolio, he said.
“Softchoice has been a transformational player in the IT industry for over 35 years, and (this acquisition) allows us to create even more value for customers as they strive to achieve their digital transformation goals,” he said.
Softchoice was founded in 1989 by David Holgate and Jone Panavas to provide hard-to-find software products to business customers. The company has grown over the years and is now one of the largest technology solutions and services providers in North America, according to Softchoice's website.
In 2013, private equity firm Birch Hill bought Softchoice for C$412 million (~$286 million). Rate Crunchbase After nearly a decade in 2021, the company filed for an initial public offering on the Toronto Stock Exchange (TSX) valued at about C$1.15 billion (~$800 million).
Softchoice's finances have been strong of late. In Q3 2024, the company reported. Year-on-year, net profit grew 10% and net income rose 8%, driven by a growing customer base. Adjusted EBITDA (interest, taxes, depreciation, and amortization) was $23.2 million for the quarter, up 2.2% from Q3 2023.
WWT said its offer represents a shareholder return of around 62% over Softchoice's initial public offering price. If the deal goes through, Softchoice will be delisted from the TSX.
“We are excited to join WWT,” Softchoice President and CEO Andrew Caprara said in a press release. “Its scale and global reach, customer base of large organizations and industry-leading infrastructure solutions are the perfect complement to our software and cloud focused solutions, our Canadian presence, and our strength in the North American mid-market.”
Founded in 1990 by Kavanaugh and David Stewart, WWT provides customers and partners with cloud computing; conceptualizing technical solutions, including projects involving data center infrastructure and app development; Assists with testing and deployment. The company's annual revenue is around $20 billion and it employs more than 10,000 people.
Softchoice is WWT's third acquisition in its history. In 2010, WWT was acquired by Baltimore, Maryland-based Performance Technology Group. In 2015, WWT acquired software company Asynchrony.