Softchoice, a Toronto-based software and cloud services provider, has agreed to be acquired by World Wide Technology (WWT) for around C$1.8 billion (approximately $1.25 billion USD).
Shareholders will receive C$24.50 per share in cash if the deal closes as planned. This proposal already has the backing of investors holding over half of Softchoice’s outstanding shares.
The agreement is expected to reach the finish line in late Q1 or early Q2 of 2025. This is pending a shareholder vote. It also requires final court approvals. There’s also a C$49 million termination fee if Softchoice walks away. Some view that as a sizable safeguard for WWT.
Softchoice CEO Andrew Caprara sees the two companies as a natural fit. “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,” he said. His optimism is shared by WWT Co-Founder and CEO Jim Kavanaugh, who believes Softchoice has been a “transformative player” over the past 35 years.
The offered share price represents a premium compared with Softchoice’s recent trading values. It shows a reported 62% overall return. This is above the firm’s 2021 initial public offering price on the Toronto Stock Exchange. Birch Hill Equity Partners, Softchoice’s largest shareholder, will vote in favor of the acquisition.
Softchoice to be delisted
Once completed, the deal will see Softchoice delist from the TSX. Headquartered in St. Louis, WWT provides technology solutions and services to large public and private organizations. It employs nearly 10,000 people worldwide. The company has a revenue of about $20 billion. It has made only a few acquisitions in its history. Softchoice would mark one of its bigger moves to date.
The merged entity could broaden WWT’s reach in commercial and mid-market segments. Softchoice’s focus on cloud, software, and AI-oriented services may bolster WWT’s existing portfolio. “We’re at the forefront of this change,” Kavanaugh said, hinting at the ongoing wave of new tech opportunities.
If everything falls into place, Softchoice will become a private subsidiary of WWT sometime next year. For now, shareholders wait for further details ahead of the special meeting planned for March. The outcome should give Softchoice’s team and its backers a firm direction for the company’s future.