‘We are excited to be joining forces with Converge as we enter the next phase in our growth journey,’ says Mainline Information Systems CEO Jeff Dobbelaere.
Channel partner all-star Converge Technology Solutions is being acquired by private equity firm H.I.G. Capital in an all-cash deal worth $910 million with plans to take the solution provider private.
The ultimate goal for H.I.G. Capital is to merge Canadian-based Converge Technology Solutions (CTS) with another fellow channel partner the private equity firm owns: Tallahassee, Fla.-based Mainline Information Systems.
“We are excited to be joining forces with Converge as we enter the next phase in our growth journey,” said Mainline’s CEO Jeff Dobbelaere in a statement. “Our specialization in hybrid cloud, on-premises infrastructure, cybersecurity, and software solutions complements Converge’s established expertise.”
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Both Mainline and CTS made CRN’s 2024 Elite 150 list of channel partners that have an extensive managed services portfolio weighted toward midmarket and enterprise customers.
Converge Technology Solutions stock price is up 55 percent today, trading at around $3.80 per share.
For third quarter 2024, CTS generated $945 million in total sales, down 9 percent year over year, while profits also decreased 9 percent to $158 million.
CTS Merger Plans With Mainline
Following the closing, Converge CEO Greg Berard (pictured) will serve as CEO of the combined business while Dobbelaere will serve as president.
Berard said he’s proud to begin “a new chapter” alongside H.I.G. and Mainline.
“This partnership not only ensures meaningful value for our shareholders but also lays the foundation to enhance how we serve our customers. As technology continues to reshape industries worldwide, delivering comprehensive and forward-thinking solutions is vital to helping our clients succeed,” Converge’s CEO Berard said in a statement.
CTS is known for its channel M&A prowess by acquiring over a dozen companies over the past several years.
Mainline was acquired by H.I.G. Capital in late 2023.
“The combined company will bring a breadth and depth of technology and services capabilities to its customers and OEM partners that is differentiated in the areas of core data center infrastructure, networking, security, and hybrid cloud,” said Aaron Tolson, managing director at H.I.G. Capital in a statement.
Details Of The Deal
Under the terms of the deal, CTS shareholders will receive $3.84 per common share in cash. The purchase price values the deal at around $910 million.
When the acquisition is completed, Converge said it will apply to delist its common shares from all public markets and cease to be a reporting issuer under Canadian securities laws.
The deal is expected to close during the second quarter of 2025.
