World Wide Technology to acquire Canadian software firm Softchoice for C$1.8bn

Softchoice Corporation, a leading Canadian provider of cloud and software-focused IT solutions, has entered into a definitive agreement to be acquired by World Wide Technology Holding Co., LLC (WWT). The all-cash transaction values Softchoice at an enterprise value of approximately C$1.8 billion, with shareholders receiving C$24.50 per share. This valuation reflects a 62% total return on Softchoice’s initial public offering price, offering immediate liquidity and certainty of value for investors.

This move marks a pivotal development in the tech industry, aligning two firms with complementary expertise in cloud computing, cybersecurity, and artificial intelligence to drive innovation and enhance digital transformation services.

What Does This Deal Mean for Shareholders?

Softchoice shareholders stand to benefit significantly from this acquisition. The agreed price of C$24.50 per share represents a 14% premium on Softchoice’s December 30, 2024, closing price and a 32% premium on its September 2024 trading price. These figures are well above the 90-day volume-weighted average and the company’s 52-week high closing price.

The deal has already secured support from shareholders representing 51.3% of outstanding shares, including Birch Hill Equity Partners, Softchoice’s largest stakeholder, along with the company’s directors and senior executives.

Experts view the transaction as a favourable move for Softchoice investors. The valuation, which includes a 13.2x EV-to-EBITDA multiple, aligns well with industry benchmarks and demonstrates the robust strategic interest in the IT solutions market.

Why Is World Wide Technology Acquiring Softchoice?

For World Wide Technology, this acquisition represents a strategic opportunity to expand its global footprint and enhance its solutions portfolio. WWT, which generates over US$20 billion in annual revenue, has built a strong reputation as a leader in AI-powered cloud solutions and digital transformation services.

Jim Kavanaugh, WWT’s Chief Executive Officer, emphasized the deal’s role in bolstering WWT’s capabilities during a transformative era for IT services. With Softchoice’s established expertise in software and cloud solutions, World Wide Technology aims to better serve enterprises navigating complex digital transformation challenges.

Similarly, Softchoice CEO Andrew Caprara expressed confidence in the alignment between the two organizations, citing their shared values of innovation and inclusivity. He described World Wide Technology as an ideal partner for Softchoice’s clients and employees, given its extensive infrastructure, large-scale customer base, and strong presence in North America.

The Bigger Picture: How This Impacts the IT Industry

The acquisition will create a powerhouse of complementary solutions in cloud computing, cybersecurity, and artificial intelligence. Softchoice’s niche expertise in small-to-medium businesses and mid-market clients complements WWT’s stronghold on large organizations, creating a comprehensive service portfolio across the entire spectrum of IT needs.

The deal also underscores the growing importance of strategic partnerships in the IT sector. As companies increasingly turn to cloud-based solutions and artificial intelligence, mergers like this highlight the need for integrated offerings that address both technical and business challenges.

What Happens Next?

The transaction will proceed through a statutory plan of arrangement under the Canada Business Corporations Act, requiring approval from at least 66 2/3% of votes cast by shareholders. Additionally, a simple majority of votes—excluding shares held by certain senior officers—must also endorse the deal.

Pending regulatory and court approvals, the acquisition is expected to close by the end of Q2 2025. After completion, Softchoice’s shares will be delisted from the Toronto Stock Exchange, and the company will cease public reporting in Canada.

Expert Opinions and Future Outlook

Market analysts view this acquisition as a strategic fit for both companies. WWT’s access to advanced technology infrastructure and its focus on delivering scalable solutions make it well-positioned to leverage Softchoice’s expertise in software and cloud solutions.

The deal also signals an ongoing wave of consolidation within the IT services sector, driven by increased demand for integrated technology solutions. As digital transformation remains a top priority for organizations globally, partnerships like this are expected to become more common.