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PCD Solutions is an integration specialist and
provider of consulting services for Hybrid IT infrastructure
environments in Quebec and
Canada, focused on system
architecture, infrastructure virtualization and high availability
and protection mechanisms related to critical applications.
TORONTO, Feb. 10, 2020 /CNW/ - Converge Technology
Solutions Corp. ("Converge" or "the Company")
(TSXV:CTS) (FSE:0ZB) (OTCQX:CTSDF) announced today that
it has acquired all of the issued and outstanding shares of
Solutions P.C.D. Inc and P.C.D. Consultation Inc. (collectively
"PCD Solutions"), a Canadian based partner focused on
solutions in enterprise system architecture, storage and
information management, virtualization and cloud, and business
continuity and disaster recovery. PCD Solutions brings its
customers and highly skilled teams comprised of experienced
technology experts, business consultants, and industry thought
leaders to Converge's fast growing platform.
PCD Solutions generated revenue of approximately $33 million for the trailing twelve month period
ended November 30, 2019.
Consideration for the purchase consisted of a combination of cash,
promissory notes and annual earn-out payments over three
years. Assuming no earn-out payments are made, the
purchase multiple for the transaction would be 5.2 times EBITDA for
the trailing twelve month period ended November 30, 2019 of approximately $2.3 million, or 4.6 times after adjusting for
positive working capital remaining in PCD Solutions at
closing. Assuming PCD Solutions achieves the minimum level of
EBITDA to earn the full earn-out payments, the purchase multiple
would be approximately 5.5 times EBITDA of $3 million in the third year following closing,
or 5.0 times after adjusting for positive working capital in PCD
Solutions at closing. The cash portion of the purchase price was
financed by Converge's credit facilities. The acquisition is
expected to be immediately accretive to Converge, resulting in
increased revenue and adjusted EBITDA.
PCD Solutions Co-Presidents Carl
Deschênes and Pierre Cayouette will continue in their
roles along with the existing PCD Solutions management team.
Converge will look to introduce its Software Enabled Hybrid IT
solutions including identity-based cognitive, cybersecurity,
resiliency managed services, multi-cloud solutions, and enterprise
Blockchain to existing and new PCD Solutions customers while
leveraging PCD Solutions specializations ranging from software
defined datacenter and cloud architecture, storage, and high
availability and protection mechanisms related to mission critical
environments to Converge clients across North America.
For the last 23 years, PCD Solutions has worked hand in hand
with customers to architect, design and deploy innovative
technology foundations for the most critical IT environments;
building a solid reputation for implementing solutions that work
along with the stability and continuity of relationships with
customers and partners.
"Change is accelerating in the era of the cloud and by joining
the Converge family, we are confident that PCD Solutions will up
the pace to serve customers better by augmenting the existing
offerings and portfolio. PCD Solutions is now poised to
deliver a more widely-based platform of services to its customers
while still offering the innovative solutions it is known for,"
said Pierre Cayouette, Co-President
of PCD Solutions. "We are excited to add Converge's platform of
offerings to new and existing customers. For us, it is the best way
to accelerate what we have started 3 years ago and become a leading
hybrid cloud integrator in our marketplace" said Carl Deschênes,
Co-President of PCD Solutions.
"We look forward to PCD Solutions joining the Converge family of
companies," said Shaun Maine, CEO of
Converge. "'We expect PCD Solutions' sales and solutions strength
to enhance our capabilities in becoming a dominant software-enabled
Hybrid IT provider in the Quebec
and Canadian marketplace as it builds on the platforms we have
created with our previous acquisitions. PCD Solutions also brings a
level of expertise around VMware that will allow us to continue to
drive value with our Converge Hybrid cloud offerings to our
clients."
PCD Solutions marks the twelfth acquisition 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.; Essex Technology Group, Inc.;
Datatrend Technologies, Inc.; and VSS, LLC.
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 PCD Solutions
PCD Solutions has been a key player in many IT infrastructure
and digital transformation projects in Quebec, including several TOP 500 Canadian
Businesses and leading public sector organizations. PCD
Solutions has put together the most competent team of VMware Cloud
infrastructure experts in the province of Quebec to assist customers in the transition
to the Hybrid Cloud era. For more information, visit
http://pcdsolutions.com.
Notice to Reader: Use of Non-IFRS Financial Measures
and Forward-Looking Statements
1. 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 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 VSS' 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.
2. 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.