Converge Technology Solutions Acquired by H.I.G. Capital in $1.3 Billion Deal

Deal News | Feb 08, 2025 | PR Newswire Cision Converge Technology Solutions Corp.

Converge Technology Solutions Corp. has been acquired by H.I.G. Capital through a cash transaction valued at CAD 1.3 billion. This strategic acquisition will provide Converge with an immediate liquidity benefit for shareholders and integrate it with H.I.G.'s Mainline Information Systems, allowing Converge to leverage Mainline's expertise in IT solutions and services. The acquisition, recommended by an independent special committee, was approved by Converge's Board of Directors. Shareholders will receive CAD 5.50 per share, a substantial premium to the prior trading prices, and approximately 24% of the shares have already pledged support for the transaction. The deal is expected to close in the second quarter of 2025, contingent on shareholder, court, and regulatory approvals. The unified entity aims to enhance its service offerings in cybersecurity, cloud, and digital infrastructure, with Greg Berard from Converge to take on the CEO role of the merged company. This acquisition will also lead to Converge applying to delist its shares from public markets.

Sectors

Private Equity
Information Technology
Corporate Finance and M&A

Geography

Canada – Converge Technology Solutions is a Canadian company listed on the TSX.
United States – H.I.G. Capital, the acquiring firm, and its subsidiary Mainline Information Systems are based in the U.S.

Industry

Private Equity – The acquisition involves private equity firm H.I.G. Capital which is making a strategic investment in Converge.
Information Technology – Converge Technology Solutions and Mainline Information Systems operate in the IT sector, providing services such as cybersecurity and cloud solutions.
Corporate Finance and M&A – The article discusses a major M&A transaction with financial advisory and legal representation involved.

Financials

CAD 1.3 billion – Enterprise value of Converge as per the acquisition terms.
CAD 5.50 per share – Cash payment offered to Converge shareholders.
56% to 57% – Premium over the closing price and 30-day volume-weighted average share price on TSX.
7.4x – Enterprise value to adjusted EBITDA multiple according to the deal.
34.4 million CAD – Termination fee payable by Converge under certain circumstances.
165 to 178 million USD – Expected gross profit range for Q4 2024 as reported by Converge.
36 to 47 million USD – Expected adjusted EBITDA range for Q4 2024 as reported by Converge.

Participants

Name	Role	Type	Description
Converge Technology Solutions Corp.	Target	Company	A Canadian IT service provider focusing on cybersecurity, cloud, and digital infrastructure solutions.
H.I.G. Capital	Acquirer	Company	A global private equity and alternative asset investment firm based in Miami, Florida.
Mainline Information Systems, LLC	Affiliate of Acquirer	Company	An IT solutions provider and H.I.G. Capital's subsidiary, which will integrate with Converge post-acquisition.
Greg Berard	Future CEO of Merged Entity	Person	Current CEO of Converge, responsible for leading the combined entity post-transaction.
Jeff Dobbelaere	Future President of Merged Entity	Person	President of Mainline, set to be President post-merger.
Aaron Tolson	Managing Director at H.I.G. Capital	Person	Involved in the strategic decision-making process for the transaction.
Canaccord Genuity Corp.	Financial Advisor	Company	Acted as the lead financial advisor to Converge.
Houlihan Lokey Capital, Inc.	Financial Advisor	Company	Served as financial advisor to the special committee.
Origin Merchant Partners	Financial Advisor	Company	Provided a fairness opinion for the special committee.
Goodmans LLP	Legal Advisor	Company	Legal advisor for Converge.
Weil, Gotshal & Manges LLP	Legal Advisor	Company	Legal advisor for H.I.G. Capital.
Stikeman Elliott LLP	Legal Advisor	Company	Legal advisor for H.I.G. Capital.