WWT Acquires Softchoice: A Bold Move to Elevate Digital Transformation
A Strategic Expansion into Cloud, Cybersecurity, and AI
Table of Contents
World Wide Technology (WWT) has made a significant splash in the IT landscape by announcing its acquisition of Canadian IT provider Softchoice for C$1.8 billion (~$1.25 billion). This all-cash deal, unanimously approved by Softchoice’s board of directors, is expected to close in late Q1 or early Q2 2025, pending customary closing conditions and regulatory approvals.
This strategic move positions WWT for even greater success as it seeks to bolster its capabilities in cloud computing, cybersecurity, and artificial intelligence (AI). Softchoice’s expertise in these rapidly evolving areas perfectly complements WWT’s existing portfolio, enabling the combined entity to offer clients a more comprehensive suite of solutions for their digital transformation journeys.
A Powerful Synergy: Scale Meets Expertise
Jim Kavanaugh, WWT’s co-founder and CEO, emphasized the strategic rationale behind this acquisition, stating that Softchoice’s “software, cloud, cybersecurity, and AI capabilities will complement WWT’s existing product portfolio.” He further highlighted the potential for creating “even greater value for our clients striving to achieve their digital transformation goals” through this merger.
Softchoice, founded in 1989, has established itself as a leading provider of technology solutions and services in North America. Its journey from supplying hard-to-find software products to becoming a major player in the IT industry reflects its adaptability and commitment to innovation.
Financial Strength Fuels Growth
Softchoice’s recent financial performance underscores its strong market position. In Q3 2024, the company reported a 10% year-over-year increase in gross profit and an 8% uptick in net income, driven by a growing customer base. Adjusted EBITDA reached $23.2 million for the quarter, representing a 2.2% growth from Q3 2023.
WWT’s offer represents a total shareholder return of around 62% over Softchoice’s initial public offering price. Upon completion of the deal, Softchoice will be delisted from the Toronto Stock Exchange (TSX).
A Win-Win Scenario: Synergies and Future Prospects
Andrew Caprara, Softchoice’s president and CEO, expressed enthusiasm about joining WWT, stating that 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.”
This acquisition marks WWT’s third major purchase in its history, following the acquisitions of Performance Technology Group in 2010 and Asynchrony in 2015. The combined entity is poised to become a formidable force in the global IT market, offering clients a comprehensive suite of solutions and expertise across various domains.
Looking Ahead: A New Era of Innovation and Growth
The acquisition of Softchoice by WWT signifies a significant milestone in the evolution of both companies. This strategic move will undoubtedly create new opportunities for growth, innovation, and value creation for clients, partners, and employees alike.
