/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
Datatrend Technologies, Inc. is a leading
technology solution provider headquartered in the Minneapolis/St. Paul area, focused on Next Gen
Data Center, Hybrid Cloud, Infrastructure, Multi-Site IT
Deployments, and ISV/OEM solutions.
TORONTO, Oct. 3, 2019 /CNW/ - Converge Technology
Solutions Corp. ("Converge" or "the Company")
(TSXV:CTS) (FSE:0ZB) (OTCQX:CTSDF) announced today that
it has acquired Datatrend Technologies, Inc. ("Datatrend"),
a leading technology solutions provider headquartered in the
Minneapolis/St. Paul area.
Datatrend brings its customers and highly skilled teams made up of
experienced technology experts, business consultants, and industry
thought leaders to Converge's fast growing platform.
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 "Datatrend Agreement"). Datatrend
generated revenues of approximately US$84.3
million and Adjusted EBITDA of approximately US$3.1 million for the 12 months ended
December 31, 2018. Under the
Datatrend Agreement, purchase consideration consisted of (i)
US$15.0 million in cash on the
closing date; and (ii) a promissory note in the amount of
US$2.5 million in favor of the
sellers. In addition, Datatrend had estimated net
working capital at closing of approximately US$5.6 million, of which approximately
$3.6 million will be paid to the
sellers in 12 months with the balance of US$2 million remaining in the company. The
cash portion of the purchase price was financed by Converge's
credit facilities.
Charlie Cox, CEO of Datatrend,
will continue to lead the business alongside the existing Datatrend
management team. Working with Charlie and his team, Converge will
look to introduce its Software Enabled Hybrid IT solutions
including identity-based enterprise blockchain, cognitive,
cybersecurity, resiliency managed services and multi-cloud
solutions to existing and new Datatrend customers while leveraging
the Datatrend Hybrid IT solutions including Next Gen data center,
Hybrid Cloud, infrastructure, multi-site IT Deployments and ISV/OEM
solutions to Converge clients across North America.
For over 32 years, Datatrend has delivered technology
infrastructure solutions from the data center to the edge of the
network in order to help businesses with their digital
transformation journey and drive impactful business results.
Datatrend provides consulting, planning, designing, implementation,
integration, project management and staffing for next generation
data centers, multi-cloud environment, cabling and wireless
solutions for multi-site rollouts and the Internet of Things, as
well as for ISV's, OEM's and service providers.
"Datatrend has successfully built a reputation over the years as
a leader in delivering technology infrastructure solutions from the
data center to the edge of the network, while developing
long-lasting personal relationships with our client base," said
Charlie Cox, President and CEO of
Datatrend. "We look forward to working with Converge to help
develop an organization that can better serve our customers across
North America and are confident
that this new business venture will be beneficial to all
stakeholders involved."
"We are thrilled that Datatrend is joining the Converge family
of companies," said Shaun Maine, CEO
of Converge. "Their reputable team supports businesses across the
nation with notable experience advancing large enterprise financial
services, travel, and hospitality customers through their
enterprise class configuration centers, project management skills
and certifications. Datatrend strengthens our central geographical
coverage, while its extensive experience with enterprise clients
will prove valuable across the organization."
Additionally, the Company is pleased to announce the following
organizational changes as the Company plans for its Phase 3
consolidation of back-office operations and standardization of
tools and processes. Cory
Reid will lead this initiative as Chief Operating Officer
("COO") and oversee all of Finance, Operations, and HR, while
concurrently leading integration initiatives for new
acquisitions. Don Cuthbertson, co-founder of Converge, will
continue to set technical direction for the Company and its cloud
team as Chief Technology Officer ("CTO"). Don will also
continue in his role as President of Canada while being at the forefront of new
business models presented by Converge's enterprise blockchain
initiatives around identity.
Datatrend marks the tenth transaction completed by Converge
since October 2017. Converge's
family of companies also includes Corus Group, LLC; Northern Micro,
Inc.; 10084182 Canada Inc. operating as Becker-Carroll; Key Information Systems, Inc.;
BlueChip Tek, Inc.; Lighthouse Computer Systems, Inc.; Software
Information Systems LLC; Nordisk Systems, Inc.; 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 their 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 Datatrend Technologies, Inc.
As a solutions
integrator, Datatrend delivers IT solutions to help organizations
leverage technology to drive impactful business outcomes.
Datatrend does this by delivering technology infrastructure
solutions from the data center to the edge of the network. By
providing planning, design, implementation, integration and project
management for next generation data centers, cloud environments,
cabling and wireless solutions for multi-site rollouts and the
Internet of Things, as well as solutions for ISVs, OEMs and service
providers, Datatrend knows how to make IT matter for
business. For more information, visit
http://datatrend.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.