Converge Technology, based in Toronto, is a “roll-up” of IT solutions providers. The company trades on the TSX Venture Exchange in Canada. As of November 2019, the company had roughly 770 employees in the United States and 80 in Canada. (See company map at bottom of article.)
PCD Solutions focuses on enterprise system architecture; storage and information management; virtualization and cloud; and business continuity and disaster recovery.
PCD Solutions partners closely with multiple infrastructure hardware, software, data protection and cloud companies. Key relationships include HP Enterprise, Hitachi, VMware, Oracle, Lenovo, IBM Red Hat, Amazon Web Services (AWS), Cohesity, Dell EMC, Veeam and ThinkOn.
PCD Solutions generated revenue of approximately $33 million for the trailing 12 month period ended November 30, 2019.
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, the EBITDA multiple is 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.
Co-Presidents Carl Deschênes and Pierre Cayouette will continue in their roles along with the existing PCD Solutions management team.
PCD will soon promote Converge Technology’s identity-based cognitive, cybersecurity, resiliency managed services, multi-cloud solutions, and enterprise Blockchain solutions to PCD customers.
In a prepared statement about the deal, PCD Co-President Pierre Cayouette:
“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. 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.”
Added Converge CEO Shaun Maine:
“We look forward to PCD Solutions joining the Converge family of companies. 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.”
Converge Technology Acquires PCD Solutions: More Business Background
ChannelE2E culled additional Converged Technology business background information from the company’s November 2019 financial report. Highlights at the time included the charts below…
Chart One Below: Converge Technology’s offices…
Chart Two Below: Converge Technology’s cloud services growth…