Softchoice’s Filing of Circular and Interim Order: A Detailed Look
Toronto-based technology solutions provider, Softchoice Corp. (Softchoice), recently announced the filing of a circular and the receipt of an interim order in relation to its proposed plan of arrangement with World Wide Technology, Inc. (WWT). This arrangement, which was initially announced on August 3, 2022, comes as part of Softchoice’s continued efforts to enhance its business and create value for its shareholders.
Background
Softchoice is a leading technology solutions provider that offers a range of IT services, including consulting, implementation, and managed services. The company operates primarily in North America and has been focusing on expanding its presence in the cloud, security, and data analytics markets. WWT is a leading technology solution provider and integrator with a focus on delivering end-to-end technology solutions to clients in various industries.
The Proposed Arrangement
Under the proposed arrangement, Softchoice will acquire all of the issued and outstanding common shares of WWT, as well as certain other securities, through a court-approved plan of arrangement under the Canada Business Corporations Act. The transaction is valued at approximately CAD 1.1 billion (USD 0.87 billion) based on the 20-day volume-weighted average price of WWT’s common shares ending on August 3, 2022. Softchoice intends to fund the transaction through a combination of cash on hand and new debt financing.
Impact on Softchoice Shareholders
Softchoice shareholders will receive 0.27 of a common share of WWT for each Softchoice common share they own. Based on the closing price of WWT’s common shares on August 5, 2022, this represents a premium of approximately 55% to the 20-day volume-weighted average price of Softchoice’s common shares ending on August 3, 2022. Softchoice’s board of directors unanimously recommends that Softchoice shareholders approve the arrangement.
Impact on WWT Shareholders
WWT shareholders will receive 0.27 of a Softchoice common share for each WWT common share they own. Based on the closing price of Softchoice’s common shares on August 5, 2022, this represents a premium of approximately 47% to the 20-day volume-weighted average price of WWT’s common shares ending on August 3, 2022. WWT’s board of directors has unanimously approved the arrangement and recommends that WWT shareholders approve the arrangement.
Regulatory Approvals and Closing
The arrangement is subject to customary closing conditions, including regulatory approvals, the approval of Softchoice and WWT shareholders, and the satisfaction of certain other conditions. Softchoice and WWT expect to complete the transaction in the first quarter of 2023. Upon closing, Softchoice will become the new parent company of WWT.
Impact on Customers and Employees
Softchoice and WWT have stated that they expect to continue to operate under their respective brands and that the transaction is not expected to result in any significant changes to their respective customer relationships or employment arrangements. However, it is important to note that integrations and other changes may occur over time as the two companies work to optimize their operations and create synergies.
Conclusion
The proposed arrangement between Softchoice and WWT represents an exciting opportunity for both companies to enhance their businesses and create value for their shareholders. By combining their complementary strengths and expertise, Softchoice and WWT will be well-positioned to provide innovative technology solutions and services to their clients and compete more effectively in the rapidly-evolving technology marketplace. As the transaction moves forward, it will be important for both Softchoice and WWT to carefully manage the integration process and communicate effectively with their stakeholders to ensure a successful outcome.
- Softchoice Corp. files circular and receives interim order for proposed plan of arrangement with World Wide Technology, Inc.
- Transaction valued at approximately CAD 1.1 billion (USD 0.87 billion)
- Softchoice shareholders to receive 0.27 of a common share of WWT for each Softchoice common share they own
- WWT shareholders to receive 0.27 of a Softchoice common share for each WWT common share they own
- Transaction expected to be completed in the first quarter of 2023
- Impact on customers and employees expected to be minimal
The proposed arrangement between Softchoice and WWT is expected to create significant value for both companies and their shareholders. By combining their complementary strengths and expertise, Softchoice and WWT will be well-positioned to provide innovative technology solutions and services to their clients and compete more effectively in the rapidly-evolving technology marketplace. It will be important for both companies to carefully manage the integration process and communicate effectively with their stakeholders to ensure a successful outcome.
As a Softchoice or WWT customer or employee, you can expect business as usual in the short term. However, it is important to stay informed about any updates or changes that may occur over time as the two companies work to optimize their operations and create synergies. We will continue to monitor this situation closely and provide updates as more information becomes available.
From a broader perspective, this transaction is a testament to the ongoing consolidation and innovation in the technology industry. As companies continue to seek ways to create value for their shareholders and compete in an increasingly competitive marketplace, we can expect to see more mergers, acquisitions, and partnerships in the future.
