A recent mega-deal capped off an eventful 2024.
On Tuesday, World Wide Technology (WWT), a technology services company based in St.
The deal, which is all cash, was unanimously approved by Softchoice’s board but has yet to be voted on by the company’s shareholders. It is also subject to court approval and customary closing conditions; the firms expect it to be finalized by the end of the first quarter or the beginning of the second quarter of 2025.
If not, Softchoice could be on the hook for a C$49 million ($34 million) termination fee. However, its board has retained the right to consider other offers.
In a statement, Jim Kavanaugh, co-founder and CEO of WWT, said Softchoice’s software, cloud, cybersecurity and AI capabilities will complement WWT’s existing product portfolio.
“Softchoice has been a transformational player in the IT industry for more than 35 years,” he said, “and (this acquisition) will enable us to create even greater value for our customers as they strive to achieve their transformation goals digital.”
Softchoice was founded in 1989 by David Holgate and Jone Panavas to supply hard-to-find software products to enterprise customers. The company grew and evolved over the years, and is now one of the largest providers of technology solutions and services in North America, according to Softchoice’s website.
In 2013, private equity firm Birch Hill acquired Softchoice for C$412 million (~$286 million), per Crunchbase. Nearly a decade later, in 2021, the company filed for an initial public offering on the Toronto Stock Exchange (TSX) that valued it at approximately C$1.15 billion (~$800 million).
Softchoice’s finances have been pretty strong lately. In the third quarter of 2024, the company reported a 10% year-over-year increase in gross profit and an 8% increase in net income, driven by a growing customer base. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $23.2 million for the quarter, up 2.2% from Q3 2023.
WWT says its offer represents a total shareholder return of about 62% over Softchoice’s initial public offering price. If the deal is completed, 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, large enterprise customer base and industry-leading infrastructure solutions are a perfect complement to our software and cloud-focused solutions, our Canadian presence and our strength in the Americas mid-market of the North.”
WWT, founded in 1990 by Kavanaugh and David Stewart, helps clients and partners conceive, test and deploy technology solutions, including projects involving cloud computing, data center infrastructure and application development. The company’s annual revenue hovers around $20 billion, and it employs a workforce of more than 10,000 people.
Softchoice is WWT’s third acquisition in its history. In 2010, WWT acquired Baltimore, Maryland-based Performance Technology Group. And in 2015, WWT acquired the software company Asynchrony.
