Softchoice Corporation and World Wide Technology Enter Into Definitive Agreement for Softchoice to Be Acquired by World Wide Technology at a Price of C$24.50 Per Share

Key highlights:

Softchoice Corporation, a Canadian software and cloud-focused IT solutions provider, and World Wide Technology Holding Co., LLC, a global technology solutions provider, combine via an all-cash transaction
Consideration of C$24.50 per share in cash, valuing Softchoice at an enterprise value (“EV”) of approximately C$1.8 billion¹
Results in a total shareholder return of approximately 62%² on the Company’s initial public offering share price
Provides immediate liquidity and certainty of value to the Company’s shareholders and is not subject to any financing condition
Culmination of robust review process, with the oversight and participation of a committee

of independent directors and highly qualified legal and financial advisors
Shareholders representing 51.3% of Softchoice’s outstanding shares have entered into voting support agreements in favour of the Transaction
Acquisition will add new capabilities to WWT’s software, cloud, cybersecurity, and AI offerings to provide a comprehensive solutions portfolio across the full spectrum of the digital transformation journey
Strengthens access to Commercial, Small and Medium business customers while expanding WWT’s position in the U.S., Canada, and around the world
Highly complementary cultures of innovation and inclusion to create impact for clients, colleagues and communities

Softchoice Corporation and World Wide Technology Enter Into Definitive Agreement for Softchoice to Be Acquired by World Wide Technology at a Price of C$24.50 Per Share

Softchoice Corporation
Public Relations
Cheryl Salman
Director, Communications and Brand
cheryl.salman@softchoice.com

Investor Relations
Tim Foran
Investor Relations
investors@softchoice.com

World Wide Technology Holding Co., LLC
Public Relations
Rebecca Morrison
Manager, Corporate Communications
rebecca.morrison@wwt.com

Softchoice Corporation (“Softchoice” or the “Company”) (TSX:SFTC) and World Wide Technology Holding Co., LLC (“World Wide Technology” or “WWT”), a global technology solutions and services provider, are pleased to announce that they have entered into an arrangement agreement (the “Arrangement Agreement”) for Softchoice to be acquired by WWT, via an all-cash transaction (the “Transaction”), which values Softchoice at an enterprise value of approximately C$1.8 billion. Shareholders, including each of the directors and senior officers of Softchoice, which collectively represent approximately 51.3% of Softchoice’s issued and outstanding common shares, have entered into voting support agreements pursuant to which such shareholders have agreed, among other things, to support and to vote all shares held by them in favour of the Transaction.

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Andrew Caprara, Softchoice President and Chief Executive Officer commented on the announcement: “We are excited to join WWT. Its scale and global reach, customer base of large organizations, and industry leading infrastructure solutions are a perfect complement to our software and cloud focused solutions, our Canadian presence, and our strength in the North American mid-market. We also share similar Great Place to Work® certified organizational cultures, demonstrating an aligned passion for our people. I believe WWT is the ideal partner for our customers and employees and I’m excited about our future as a combined firm.”

Jim Kavanaugh, WWT Co-Founder and Chief Executive Officer noted: “As the AI revolution reshapes industries and transforms businesses worldwide, we are at the forefront of this change – leading by empowering enterprises of all sizes to achieve better business outcomes. Softchoice has been a transformative player in the IT industry for over 35 years, and adding its complementary software, cloud, cybersecurity and AI capabilities to WWT’s portfolio will enable us to create even greater value for our clients striving to achieve their digital transformation goals.”

David Steward, WWT Founder and Chairman added: “This acquisition strengthens our access to Commercial, Small and Medium business customers while expanding WWT’s position in the U.S., Canada, and around the world. Given our shared mission and Great Place to Work® designations, we will continue our commitment to building a culture of innovation and inclusion to be a great place to work for all.”

Transaction Highlights

Under the terms of the Arrangement Agreement, WWT, through an affiliate, will acquire all the issued and outstanding common shares of Softchoice for a price of C$24.50 per share, in cash, valuing the Company at an EV of approximately C$1.8 billion. This price represents premiums of approximately 14%, 32% and 19%, to the closing price of the shares on the Toronto Stock Exchange (the “TSX”) on December 30, 2024, the closing price of the shares on the TSX on September 23, 2024, the day prior to commencement of the review process, and the 90-day volume weighted average price³, respectively. The purchase price is also above the 52-week high closing price of the common shares as of December 30, 2024, and represents a total shareholder return of approximately 62% to the Company’s initial public offering price of C$20.00, as adjusted for Softchoice’s historical dividend payments. Based on the Company’s reported financial results for the trailing twelve months to September 30, 2024, the Consideration values the Company at an EV to Adjusted EBITDA multiple of ~13.2x.⁴

Transaction Details

The Company entered into the Arrangement Agreement based on the unanimous approval of the Company’s board of directors (the “Board”), following receipt of the unanimous recommendation of a committee of independent directors (the “Special Committee”), and having determined that the Transaction is in the best interests of the Company and is fair to the shareholders of the Company. The Arrangement Agreement was the result of a comprehensive solicitation and negotiation process that was undertaken at arm’s length with the oversight and participation of the Special Committee advised by highly qualified legal and financial advisors. See “Unanimous Board Approval” below.

The Transaction will be implemented by way of a statutory plan of arrangement under the Canada Business Corporations Act. Implementation of the Transaction will be subject to, among other things, the approval at the special meeting of shareholders (the “Shareholders’ Meeting”) of (i) at least 66 2/3% of the votes cast by shareholders and (ii) a simple majority of the votes cast by shareholders (excluding common shares held by certain senior officers of the Company, whose shares are required to be excluded pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions). The Company intends to hold the Shareholders’ Meeting in March 2025, where the Transaction will be considered and voted upon by shareholders of record. The Transaction is also subject to court approval and customary closing conditions, including receipt of key regulatory approvals, is not subject to any financing condition and, assuming the timely receipt of all required key regulatory approvals, is expected to close in late Q1 or early Q2 2025.

A termination fee of C$49 million would be payable by Softchoice in certain circumstances, including in the context of Softchoice entering into a definitive agreement with respect to a superior proposal.

Birch Hill Equity Partners (“Birch Hill”) and each of the directors and senior officers of the Company, representing approximately 51.3% of the outstanding shares of Softchoice, have entered into voting support agreements under which they have agreed, among other things, to support and to vote all shares held by them in favour of the Transaction. The voting support agreements terminate automatically upon termination of the Arrangement Agreement.

Following completion of the Transaction, it is expected that the outstanding shares will be delisted from the TSX and that Softchoice will cease to be a reporting issuer in all applicable Canadian jurisdictions.

Unanimous Board Approval

In making its determination to unanimously recommend approval of the Transaction to the Board, the Special Committee, and in the Board’s determination to approve the Transaction, the Board, considered, among other things, the following reasons for the Transaction:

All-cash consideration providing certainty of value and liquidity – the all-cash consideration is not subject to any financing condition and provides Softchoice's shareholders with certain and immediate value and liquidity;
Compelling value – the implied valuation multiple on the Transaction of 13.2x, compares favourably to transactions in the software and technology sector, as well as the current trading value of Softchoice’s Canadian and other globally publicly listed peers and their corresponding implied multiples based on prevailing equity research analyst consensus estimates for both the Company and its peers;
Fairness Opinions – receipt by the Board of fairness opinions from each of TD Securities Inc. (“TD Securities”) and RBC Dominion Securities Inc. (“RBC Capital Markets”), and receipt by the Special Committee of an independent fairness opinion from Origin Merchant Partners (“Origin”), which each concluded that, based upon and subject to the assumptions, limitations and qualifications set out in their respective opinions, that the consideration to be received by shareholders of Softchoice pursuant to the Transaction is fair, from a financial point of view, to such shareholders;
Arrangement Agreement Terms – the Arrangement Agreement is the result of a comprehensive negotiation process that was undertaken at arm’s length with the oversight and participation of the Special Committee advised by highly qualified legal and financial advisors and resulted in terms and conditions that are reasonable in the judgment of the Special Committee and the Board, including customary “fiduciary out” rights that would enable the Company to enter into a definitive agreement with respect to an unsolicited proposal that constitutes a superior proposal (as defined in the Arrangement Agreement) in certain circumstances;
Robust Review Process – following the receipt of unsolicited inquiries from third parties, the Company was marketed widely to potential strategic and financial counterparties in connection with a review process conducted by the Board and the Special Committee, which did not surface any proposal superior to the Transaction;
Ability to Respond to Superior Proposal – subject to compliance with the Arrangement Agreement, the Board, in certain circumstances until shareholder approval is obtained, is able to consider, accept and enter into a definitive agreement with respect to an unsolicited proposal that constitutes a superior proposal. The voting support agreements automatically terminate upon, among other circumstances, the Company entering into a definitive agreement with respect to a superior proposal. The termination fee payable by the Company of C$49 million is reasonable in the circumstances and only payable in customary and limited circumstances; and
Support for the Transaction – Birch Hill, the Company’s largest shareholder, as well as each director and senior officer of the Company have entered into voting support agreements pursuant to which such shareholders have agreed, among other things, to support and to vote all shares held by them in favour of the Transaction. Collectively, such shareholders represent approximately 51.3% of the outstanding common shares of Softchoice.

Fairness Opinions

TD Securities and RBC Capital Markets and Origin orally delivered fairness opinions to the Board and the Special Committee, respectively, to the effect that, as of December 30, 2024, subject to the assumptions, limitations and qualifications communicated to the Company, and to be contained in the TD Securities, RBC Capital Markets and Origin written fairness opinions (the “Fairness Opinions”), the consideration to be received by shareholders pursuant to the Arrangement Agreement is fair, from a financial point of view, to such shareholders.

Copies of the Fairness Opinions, as well as additional details regarding the terms and conditions of the Transaction and the rationale for the recommendation made by the Board of Directors will be set out in the management proxy circular to be mailed to shareholders in connection with the Shareholders’ Meeting and filed by the Company on its profile on SEDAR+ at www.sedarplus.ca.

Important Additional Information and Where to Find It

In connection with the Transaction, Softchoice intends to file relevant materials on its profile on SEDAR+. Shareholders will be able to obtain these documents, as well as other filings containing information about Softchoice, the Transaction and related matters, without charge from the SEDAR+ website at www.sedarplus.ca.

Advisors

TD Securities is acting as lead financial advisor to the Company, and RBC is acting as co-lead financial advisor to the Company. Origin is acting as an independent financial advisor to the Board of Directors. Stikeman Elliott LLP is acting as legal advisor to the Company.

BDT & MSD and BofA Securities are acting as financial advisors to WWT, while Blake, Cassels & Graydon LLP and Bryan Cave Leighton Paisner LLP are acting as legal advisors to WWT.

About Softchoice Corporation

Softchoice Corporation (TSX:SFTC) is a Software and Cloud-Focused IT solutions provider that equips organizations to be agile, innovative, and secure, and people to be engaged, connected and creative at work. We do this by delivering secure, AI-powered cloud and digital workplace solutions supported by our advanced software asset management methodology and capabilities. Through our customer success framework, we create value for our customers by reducing their IT spending, optimizing their technology, and supporting business-driven innovation. We are a highly engaged, high-performing team that is welcoming, inclusive, and diverse in thought and experience, and are certified as a Great Place to Work® in Canada and the United States. For more information, visit:

Website: www.softchoice.com

About World Wide Technology Holding Co., LLC

Founded in 1990, World Wide Technology Holding Co., LLC, a global technology solutions provider leading the AI and Digital Revolution, with $20 billion in annual revenue, combines the power of strategy, execution and partnership to accelerate digital transformational outcomes for large public and private organizations around the world. Through its Advanced Technology Center, a collaborative ecosystem of the world’s most advanced hardware and software solutions, WWT helps customers and partners conceptualize, test and validate innovative technology solutions for the best business outcomes and then deploys them at scale through its global warehousing, distribution and integration capabilities.

With nearly 10,000 employees and more than 55 locations around the world, WWT’s culture, built on a set of core values and established leadership philosophies, has been recognized 13 years in a row by Fortune and Great Place to Work® for its unique blend of determination, innovation and leadership focus on diversity and inclusion. With this culture at its foundation, WWT bridges the gap between business and technology to make a new world happen for its customers, partners and communities. For more information, visit:

Website: www.wwt.com

Forward-Looking Information

This press release contains “forward-looking information” and “forward-looking statements” (collectively, “Forward-looking information”) within the meaning of applicable securities laws. This forward-looking information is identified by the use of terms and phrases such as “may”, “would”, “should”, “could”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe”, or “continue”, the negative of these terms and similar terminology, including references to assumptions, although not all forward-looking information contains these terms and phrases. Particularly, statements regarding the proposed Transaction, including the reasons of the Board for entering into the Arrangement Agreement, the terms and conditions of the Arrangement Agreement, the attractiveness of the Transaction from a financial point of view, the expected benefits of the Transaction, the anticipated timing and the various steps to be completed in connection with the Transaction, including (among other things) the holding of the Shareholders’ Meeting (including the timing thereof) as well as the satisfaction or waiver of the conditions to completing the Transaction (such as receipt of required shareholder approvals, court approvals and regulatory approvals), the anticipated closing of the Transaction (including the timing thereof), the anticipated delisting of the Company’s common shares from the TSX and the Company ceasing to be a reporting issuer is forward-looking information.

In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events or circumstances.

Forward-looking information is based on management’s beliefs and assumptions and on information currently available to management, and although the forward-looking information contained herein is based upon what we believe are reasonable assumptions, investors are cautioned against placing undue reliance on this information since actual results may vary from the forward-looking information.

Forward-looking information involves known and unknown risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, the risk factors described in greater detail under “Risk Factors” of the Company’s annual information form filed on SEDAR+. These risks and uncertainties further include (but are not limited to) as concerns the Transaction, the failure of the parties to obtain the necessary shareholder, regulatory and court approvals or to otherwise satisfy the conditions to the completion of the Transaction, failure of the parties to obtain such approvals or satisfy such conditions in a timely manner, significant Transaction costs or unknown liabilities, failure to realize the expected benefits of the Transaction, and general economic conditions. Failure to obtain the necessary shareholder, regulatory and court approvals, or the failure of the parties to otherwise satisfy the conditions to the completion of the Transaction or to complete the Transaction, may result in the Transaction not being completed on the proposed terms, or at all. In addition, if the Transaction is not completed, and the Company continues as a publicly-traded entity, there are risks that the announcement of the proposed Transaction and the dedication of substantial resources of the Company to the completion of the Transaction could have an impact on its business and strategic relationships (including with future and prospective employees, customers, suppliers and partners), operating results and activities in general, and could have a material adverse effect on its current and future operations, financial condition and prospects. Furthermore, in certain circumstances, the Company may be required to pay a termination fee pursuant to the terms of the Arrangement Agreement which could have a material adverse effect on its financial position and results of operations and its ability to fund growth prospects and current operations.

Consequently, all of the forward-looking information contained herein is qualified by the foregoing cautionary statements, and there can be no guarantee that the results or developments that we anticipate will be realized or, even if substantially realized, that they will have the expected consequences or effects on our business, financial condition or results of operation. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained herein represents our expectations as of the date hereof or as of the date it is otherwise stated to be made, as applicable, and is subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or amend such forward-looking information whether as a result of new information, future events or otherwise, except as may be required by applicable law.

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¹ Based on September 30, 2024 net debt outstanding and using Bank of Canada USD to CAD exchange rate as of December 30, 2024.
² Calculated as consideration price per share plus all dividends paid since IPO plus C$0.13 per share dividend declared on November 7, 2024, assuming reinvestment of dividends into the Company.
³ Based on weighted average trading price on the TSX for the 90 trading days prior to announcement.
⁴ “Adjusted EBITDA” is not a recognized measure under International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board, and does not have a standardized meaning prescribed by IFRS. For more information on non-IFRS measures and a reconciliation to the most comparable IFRS measures, see the Company’s management’s discussion and analysis of financial condition and results of operations for the three and nine months ended September 30, 2024 and September 30, 2023.