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Tech services firm WWT acquires Canadian IT provider Softchoice in all-cash deal

December 31, 2024 | by AI

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World Wide Technology’s Bold Move: Acquiring Softchoice for C$1.8 Billion

In a significant development in the tech world, World Wide Technology (WWT), a well-established tech services company from St. Louis, announced its plans to acquire Canadian IT provider Softchoice. This move, which is valued at an impressive C$1.8 billion (~$1.25 billion), underscores WWT’s strategic expansion in the tech industry. The deal is fully backed by Softchoice’s board but awaits approval from shareholders and the courts, with expectations to close in late Q1 or early Q2 2025.

  • The all-cash acquisition was unanimously approved by Softchoice’s board.
  • Shareholders and court approval are pending.
  • Softchoice faces a C$49 million (~$34 million) termination fee if the deal doesn’t close.
  • The board retains rights to entertain other offers.

“Softchoice has been a transformative player in the IT industry for over 35 years, and this acquisition will enable us to create even greater value for our clients striving to achieve their digital transformation goals,” remarked Jim Kavanaugh, WWT’s co-founder and CEO.

{Jim Kavanaugh, CEO of WWT}

Founded in 1989 by David Holgate and Jone Panavas, Softchoice has evolved into one of North America’s largest tech solutions providers. Its growth narrative includes a notable acquisition by Birch Hill for C$412 million (~$286 million) in 2013 and a public offering on the Toronto Stock Exchange (TSX) in 2021, valuing it at around C$1.15 billion (~$800 million). Recent financial reports indicate strong performance with a 10% increase in gross profit and an 8% rise in net income year-over-year for Q3 2024.

WWT highlights that its offer represents a substantial total shareholder return of approximately 62% over Softchoice’s initial public offering price. The acquisition will lead to Softchoice’s delisting from TSX. Andrew Caprara, president and CEO of Softchoice, expressed enthusiasm about joining forces with WWT, emphasizing the complementary nature of their services and market presence.

“We are excited to join WWT,” said Andrew Caprara. “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.”

{Andrew Caprara, President and CEO of Softchoice}

WWT, founded in 1990 by Kavanaugh and David Stewart, is renowned for helping clients design, test, and implement cutting-edge tech solutions across cloud computing and data center infrastructure. With an annual revenue of roughly $20 billion and over 10,000 employees globally, this acquisition marks WWT’s third strategic purchase following its acquisitions of Performance Technology Group in 2010 and Asynchrony in 2015.

As the deal progresses through regulatory hurdles, it’s clear that WWT’s ambition is set on expanding its footprint further into North America, leveraging Softchoice’s expertise in software, cloud services, cybersecurity, and AI to deliver unmatched value to clients aiming for digital transformation success.

Image Credit: Ulrick Trappschuh on Pexels

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