TORONTO and GATINEAU, QC, March 14,
2025 /PRNewswire/ - Converge Technology Solutions
Corp. ("Converge" or the "Company") (TSX: CTS) (FSE:
0ZB) (OTCQX: CTSDF) is pleased to announce its management
information circular (the "Circular") in connection with the
Company's upcoming special meeting (the "Meeting") of the
holders (the "Shareholders") of common shares of Converge
(the "Shares") is now available under Converge's profile on
SEDAR+ (www.sedarplus.ca) as well as on the Company's website at
https://convergetp.com/investor-relations/special-meeting-vote/.
The mailing of the Circular and related materials for the Meeting,
to Shareholders, has also commenced.
Further, the Company announced today that the Ontario Superior
Court of Justice (Commercial List) has issued an interim order in
connection with the Arrangement (as defined below), authorizing the
calling and holding of the Meeting and other matters related to the
conduct of the Meeting. The Company also announced that the waiting
period applicable to the Arrangement (as defined below) under the
Hart-Scott Rodino Antitrust Improvements Act of 1976
(United States) (the "HSR
Act") has expired. The expiration of the waiting period under
the HSR Act satisfies one of the conditions necessary for
completion of the Arrangement.
The Arrangement and Meeting Details
On February 6, 2025, the Company
entered into an arrangement agreement (the "Arrangement
Agreement") with 16728421 Canada Inc. (the "Purchaser"),
an affiliate of H.I.G. Capital ("H.I.G."), in respect of a
proposed statutory plan of arrangement (the "Arrangement")
under the Canada Business Corporations Act under which,
among other things, the Purchaser will acquire all of the
outstanding Shares for cash consideration of C$5.50 per Share (the "Consideration"),
other than certain Shares held by certain Shareholders who entered
into rollover equity agreements (the "Rollover
Shareholders"). The Consideration values the Company at an
enterprise value of approximately C$1.3
billion. At the Meeting, Shareholders will be asked to vote
on a special resolution (the "Arrangement Resolution") to
approve the Arrangement.
Converge will hold the Meeting on April
10, 2025, at 11:00 a.m.
(Toronto time) in a virtual-only
meeting format, online at https://meetnow.global//MWUKHQ6, with the
ability for participation electronically in the virtual Meeting as
explained further in the Circular. Only Shareholders of record
as of the close of business on March 10,
2025 are entitled to receive notice of, attend, participate
and vote at, the Meeting. The Arrangement is expected to be
completed on or about April 17,
2025.
The Board of Directors of Converge unanimously
(with an interested director abstaining) recommends that
Shareholders vote FOR the Arrangement Resolution.
Reasons for the Arrangement and Board Recommendation
In the course of their evaluation of the Arrangement, a special
committee (the "Special Committee") of the board of
directors of Converge (the "Board"), comprised of
independent directors of the Company, and the Board consulted with
the Company's legal counsel and the Special Committee's and the
Company's respective financial advisors and the Company's
management, and considered a number of factors including, among
others, the following:
- Significant Premium. The Consideration represents a
premium of approximately 56% to the closing price of the Shares on
the Toronto Stock Exchange (the "TSX") on February 6, 2025 and a premium of approximately
57% to the Company's 30-day volume-weighted average price of the
Shares on the TSX for the period ending on February 6, 2025, the last trading day prior to
the announcement of the Arrangement.
- Certainty and Immediate Liquidity. The Consideration
provides certainty, immediate value and liquidity to the
Shareholders (other than the Rollover Shareholders) while
eliminating the effect on the Shareholders of any further dilution,
long-term business and execution risk or to financial markets or
economic conditions.
- Other Available Alternatives. The Special Committee and
the Board believe the Arrangement is an attractive proposition for
the Shareholders relative to the status quo and other alternatives
reasonably available to the Company, taking into account the
current and anticipated opportunities and risks and uncertainties
associated with the Company's business, affairs, operations,
industry and prospects, including the execution risks associated
with its standalone strategic plan, the Company's competitive
position, the current and anticipated macroeconomic and political
environment, the current and anticipated risks with Canadian equity
markets and the sensitivity of the technology solutions provider
sector to trends impacting key technology partners and vendors.
There is no assurance that the continued operation of the Company
under its current business model and pursuit of future business
plan would yield equivalent or greater value for all Shareholders
compared to that available under the Arrangement.
- Result of a Comprehensive Process. Under the supervision
of the Board and the Special Committee and guidance of its
financial advisors, a broad group of potential counterparties were
contacted since the beginning of the initial strategic review
process in 2022, including global strategic parties and financial
sponsors with a focus on the IT services/solutions industry. This
ultimately resulted in four parties actively participating in the
most recent stage of the process, and three submitting offers and
subsequent revised offers. None of the other parties offered to
transact at a competitive level to the Consideration and deal terms
proposed in the Arrangement.
- Negotiated Arrangement. The Arrangement Agreement is the
result of a comprehensive negotiation process with H.I.G. that was
undertaken by the Company and its legal and financial advisors with
the oversight and participation of the Special Committee and the
Board. The Arrangement Agreement includes terms and conditions that
are reasonable in the judgment of the Special Committee and the
Board with the advice of the Company's legal and financial
advisors, including customary "fiduciary out" rights that would
enable the Company to enter into a superior proposal in certain
circumstances.
Additional details with respect to the Arrangement, the reasons
for the unanimous recommendation of the Board and Special
Committee, as well as its potential benefits and risks are
described in the Circular.
Shareholders are encouraged to read the
Circular in its entirety and vote their Shares as soon as possible
ahead of the proxy voting deadline on Tuesday, April 8, 2025 at 11:00 a.m.
(Toronto time).
Shareholder Questions
Shareholders who have any questions or require assistance with
voting may contact Laurel Hill Advisory Group, Converge's proxy
solicitation agent and Shareholder communications advisor:
Laurel Hill Advisory Group
Toll Free:
1-877-452-7184 (for Shareholders in North
America)
International: +1 416-304-0211 (for Shareholders outside
Canada and the US)
By Email: assistance@laurelhill.com
About Converge
Converge Technology Solutions Corp. is reimagining the way
businesses think about IT—a vision driven by people, for people.
Since 2017, we've focused on delivering outcomes-driven solutions
that tackle human-centered challenges. As a services-led,
software-enabled, IT & Cloud Solutions provider, we combine
deep expertise, local connections, and global resources to deliver
industry-leading solutions.
Through advanced analytics, artificial intelligence (AI), cloud
platforms, cybersecurity, digital infrastructure, and workplace
transformation, we empower businesses across industries to
innovate, streamline operations, and achieve meaningful results.
Our AIM (Advise, Implement, Manage) methodology ensures solutions
are tailored to our customers' specific needs, aligning with
existing systems to drive success without complexity.
Discover IT reimagined with Converge—where innovation meets
people. Learn more at convergetp.com.
Forward-Looking Information
This press release contains certain "forward-looking
information" and "forward-looking statements" (collectively,
"forward-looking statements") within the meaning of
applicable Canadian securities legislation regarding Converge and
its business. Any statement that involves discussions with respect
to predictions, expectations, beliefs, plans, projections,
objectives, assumptions, future events or performance (often but
not always using phrases such as "expects", or "does not expect",
"is expected" "anticipates" or "does not anticipate", "plans",
"budget", "scheduled", "forecasts". "estimates", "believes" or
"intends" or variations of such words and phrases or stating that
certain actions, events or results "may" or "could", "would",
"might" or "will" be taken to occur or be achieved) are not
statements of historical fact and may be forward-looking
statements.
Specifically, the anticipated benefits of the Arrangement for
the Company, its employees, business partners, shareholders and
other stakeholders and the anticipated timing of the Meeting,
completion of mailing of the Circular and Meeting materials and
completion of the Arrangement and other statements that are not
statements of historical facts are considered forward-looking
information. The forward-looking information are based on
management's opinions, estimates and assumptions, including, but
not limited to: assumptions as to the ability of the parties to
receive, in a timely manner and on satisfactory terms, the
necessary regulatory, court and shareholder approvals; the ability
of the parties to satisfy, in a timely manner, the other conditions
for the completion of the Arrangement, and other expectations and
assumptions concerning the Arrangement. The anticipated dates
indicated may change for a number of reasons, including the
necessity to extend the time limits for satisfying the other
conditions for the completion of the Arrangement or the ability of
the Board to consider and approve, subject to compliance by the
Company of its obligations under the Arrangement Agreement, a
superior proposal for the Company. While these opinions, estimates
and assumptions are considered by the Company to be appropriate and
reasonable in the circumstances as of the date of this press
release, they are subject to known and unknown risks,
uncertainties, assumptions and other factors that may cause the
actual results, levels of activity, performance, or achievements to
be materially different from those expressed or implied by such
forward-looking information.
The forward looking information are subject to significant risks
including, without limitation: the failure of the parties to obtain
the necessary shareholder, regulatory and court approvals or to
otherwise satisfy the conditions for the completion of the
Arrangement; failure of the parties to obtain such approvals or
satisfy such conditions in a timely manner; H.I.G's ability to
complete the anticipated debt and equity financing as contemplated
by applicable commitment letters or to otherwise secure favourable
terms for alternative financing; significant transaction costs or
unknown liabilities; the ability of the Board to consider and
approve, subject to compliance by the Company with its obligations
under the Arrangement Agreement, a superior proposal for the
Company; the failure to realize the expected benefits of the
Arrangement; the effect of the announcement of the Arrangement on
the ability of Converge to retain and hire key personnel and
maintain business relationships with customers, suppliers and
others with whom they each do business, or on Converge's operating
results; the market price of Shares and business generally;
potential legal proceedings relating to the Arrangement and the
outcome of any such legal proceeding; the inherent risks, costs and
uncertainties associated with transitioning the business
successfully and risks of not achieving all or any of the
anticipated benefits of the Arrangement, or the risk that the
anticipated benefits of the Arrangement may not be fully realized
or take longer to realize than expected; the occurrence of any
event, change or other circumstances that could give rise to the
termination of the Arrangement Agreement and general economic
conditions. Failure to obtain the necessary shareholder, regulatory
and court approvals, or the failure of the parties to otherwise
satisfy the conditions for the completion of the Arrangement or to
complete the Arrangement, may result in the Arrangement not being
completed on the proposed terms or at all. In addition, if the
Arrangement is not completed, and the Company continues as an
independent entity, there are risks that the announcement of the
Arrangement and the dedication of substantial resources by the
Company to the completion of the Arrangement could have an impact
on its business and strategic relationships, including with future
and prospective employees, customers, suppliers and partners,
operating results and activities in general, and could have a
material adverse effect on its current and future operations,
financial condition and prospects.
If any of these risks or uncertainties materialize, or if the
opinions, estimates or assumptions underlying the forward-looking
information prove incorrect, actual results or future events might
vary materially from those anticipated in the forward-looking
information. Although the Company has attempted to identify
important risk factors that could cause actual results to differ
materially from those contained in forward-looking information,
there may be other risk factors not presently known to the Company
or that the Company presently believes are not material that could
also cause actual results or future events to differ materially
from those expressed in such forward-looking information.
There can be no assurance that such information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such information. Accordingly,
you should not place undue reliance on forward-looking information,
which speaks only as of the date made. The forward-looking
information contained in this press release represents the
Company's expectations as of the date specified herein, and are
subject to change after such date. However, the Company disclaims
any intention or obligation or undertaking to update or revise any
forward-looking information or to publicly announce the results of
any revisions to any of those statements, whether as a result of
new information, future events or otherwise, except as required
under applicable securities laws.
All of the forward-looking information contained in this press
release is expressly qualified by the foregoing cautionary
statements.
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SOURCE Converge Technology Solutions Corp.
