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Nordisk is a leading technology solution
provider in the Northwest US focused on infrastructure, cloud,
security, analytics, business continuity and managed services
solutions.
TORONTO, July 3, 2019 /CNW/ - Converge Technology
Solutions, Corp. ("Converge" or "the Company")
(TSXV:CTS) (FSE:0ZB) (OTCQX:CTSDF) announced today that it
has acquired Nordisk Systems, Inc. ("Nordisk"), a Northwest
based partner focused on infrastructure, cloud, security,
analytics, business continuity and managed services solutions.
Nordisk brings highly skilled teams of experienced technology
experts, business consultants, and industry thought leaders to
Converge's fast growing platform.
Nordisk generated revenues of approximately US$19.3 million and Adjusted EBITDA of
approximately US$1.5 million for the
trailing 12 months ended April 30,
2019. The acquisition was completed pursuant to an equity
purchase agreement among Converge Acquisition, LLC, a wholly owned
subsidiary of Converge, as purchaser, and certain individual
sellers (the "Nordisk Agreement"). Under the Nordisk
Agreement, purchase consideration consisted of (i) US$2.5 million in cash on the closing date; (ii)
US$2.0 million in cash on
September 30, 2019; (iii) a
promissory note in the amount of US$2.0
million in favor of the sellers; and (iv) up to an aggregate
of US$3.0 million in earn-out
payments for the three years following closing of the acquisition
(up to a maximum of US$1.0 million in
each of the three years based on the achievement of certain
milestones. Assuming the full earn-out is earned, the
resulting estimated purchase price multiple would be approximately
3.9 times average adjusted EBITDA over the earn out period, based
on the minimum adjusted EDITDA required to achieve the full
earn-out. The cash portion of the purchase price
was financed by Converge's credit facilities.
Nordisk CEO Deney
Dentel will continue in his role along with the
existing Nordisk management team. Working with Deney,
Converge will look to extend Nordisk's capabilities and solutions
to customers across North America
while introducing Converge's Hybrid IT solutions including
identity-based enterprise Blockchain, cognitive, cybersecurity,
resiliency managed services and multi-cloud solutions to current
Nordisk customers.
"Our team at Nordisk is dedicated to relieving customer
technology burdens since 1983. Our exceptional staff of
highly certified industry veterans, and our longstanding
relationships with manufacturers and building relations with
emerging technology manufacturers deliver the highest quality
technology and remain on the leading edge. As trusted advisors, we
enable our clients to exceed their goals and objectives to ensure
long-term success," said Deney
Dentel. "The fit between the companies made perfect
sense. I couldn't be more excited about what is ahead for the
Nordisk team and our customers. The Converge culture and their way
of doing business is spot on."
Nordisk has a team of distinguished engineers that understands
customer current needs and goals and can architect visionary
infrastructure that is efficient today and ready for the
future.
"We are pleased that Nordisk is joining the Converge family of
companies," said Shaun Maine, CEO of
Converge. "As a longstanding and top tier performer in the IBM
ecosystem, Nordisk extends our IBM footprint allowing Converge to
expand our software strategy, particularly Red Hat after its
acquisition by IBM is completed. Nordisk also provides
geographical coverage in the Northwest as part of our 3 phase plan
to be a premier North American Hybrid IT provider."
Nordisk marks the ninth transaction completed by Converge since
October 2017. Converge's family of
companies also includes Corus Group, LLC; Northern Micro, Inc.;
Becker-Carroll; Key Information Systems, Inc.; BlueChipTek, Inc.;
Lighthouse Systems, Inc.; Software Information Systems, LLC; and
Essex Technology Group, Inc.
About Converge
Converge Technology Solutions Corp.
combines innovation accelerators and foundational infrastructure
solutions to deliver best-of-breed solutions and services to
customers. The Company is building a platform of regionally-focused
Hybrid IT solutions providers to enhance the ability to provide
multi-cloud solutions, blockchain, resiliency, and managed
services, enabling Converge to address the business and IT issues
that public and private-sector organizations face today. For more
information, visit http://www.convergetp.com.
About Nordisk
Nordisk Systems, Inc. is a leading
technology solution provider with over three decades of experience
in the industry. Since founded in 1983, Nordisk is committed
to relieving its customers' technology burdens, with the ability to
architect visionary infrastructure that solves immediate needs
while focusing to achieve future business initiatives. For
more information, visit http://www.nordisksystems.com
Notice to Reader: Use of Non-IFRS Financial Measures
and Forward-Looking Statements
- Non-IFRS Financial Measures
In this news release,
certain non-IFRS measures to evaluate performance are used.
The term "Adjusted EBITDA" does not have any standardized meaning
prescribed within IFRS and therefore may not be comparable to
similar measures presented by other companies. Such measures
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS such as
net income. Adjusted EBITDA is defined as gross profit less
selling, general and administrative expenses, and corresponds to
income before income tax, depreciation and amortization, finance
expenses, change in fair value of contingent consideration,
transaction costs for acquisitions, initial public offering costs
and other non-operating expenses.
Management believes Adjusted EBITDA is an important indicator as it
excludes certain items that are non-cash expenses, items that
cannot be influenced by management in the short term and items that
do not impact core operating performance, demonstrating the
Company's ability to generate liquidity through operating cash flow
to fund working capital needs, service outstanding debt and fund
future capital expenditures. Adjusted EBITDA is used by some
investors and analysts for the purposes of valuing an issuer.
The intent of Adjusted EBITDA is to provide additional useful
information to investors and analysts and is also used by
management as an internal performance measurement.
- Forward-Looking Information
This news 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. Forward-looking statements are
necessarily based upon a number of estimates and assumptions that,
while considered reasonable, are subject to known and unknown
risks, uncertainties, and other factors which may cause the actual
results and future events to differ materially from those expressed
or implied by such forward-looking statements. Except as required
by law, Converge assumes no obligation to update the
forward-looking statements of beliefs, opinions, projections, or
other factors, should they change. The reader is cautioned
not to place undue reliance on forward-looking statements.
Neither the TSX Venture Exchange nor its regulation services
provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Converge Technology Solutions Corp.