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Enterprise MSP Acquisition: Converge Technology Solutions Buys PDS At Reasonable Valuation

Converge Technology Solutions Corp. has acquired enterprise MSP Paragon Development Systems (PDS) for $52 million from private equity firm Mason Wells. The deal's valuation was 5.8 times adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the trailing 12-month period ended November 30, 2021, the buyer said.

This is technology M&A deal number 58 that ChannelE2E has covered so far in 2022. See more than 1,000 technology M&A deals for 2022, 2021, and 2020 listed here.

Converge Technology Solutions Buys PDS: Business Details

PDS provides digital workspace, enterprise solutions, professional service, and managed services to clientele in such vertical markets as Healthcare, Corporate, and Public Sectors. PDS generated annual revenue of approximately C$239 million (roughly US $187.7 million) with an adjusted EBITDA of C$11.4 million (US $9.1 million).

Converge Technology Solutions is a software-oriented IT & cloud solutions provider. Areas of expertise include advanced analytics, cloud, and cybersecurity offerings. Key capabilities span managed services and digital infrastructure.

Converge has extensive M&A experience. The company has acquired 26 businesses since October 2017, the buyer said.

Mason Wells, meanwhile, had owned PDS since February 2011.

Converge Technology Solutions Buys PDS: Executive Perspectives

In a prepared statement about the deal, Converge CEO Shaun Maine said:

“We’re pleased to announce the addition of Paragon Development Systems, with its expertise in digital transformation, to Converge’s portfolio of companies. PDS’s knowledge and proficiency in the healthcare space will enhance Converge’s ability to deliver enterprise solutions and managed services to our clients in this sector across North America. Additionally, PDS’s presence in the central region will give us more scale across Wisconsin, Illinois, and Minnesota to help us continue to meet the requirements of our clients in these areas.”

Added Greg Berard, president of North America at Converge:

“Converge is looking forward to working with Paragon Development Systems leadership to continue driving value and delivering an enhanced level of satisfaction that PDS clients have come to rely on over the past few decades. The synergies between Converge and PDS will allow us to offer increased benefits and an expanded solution portfolio for our mutual clients across North America.”

M&A Deal Advisors

Multiple third-party firms assisted with the M&A deal.

  • martinwolf, an M&A advisory firm serving the middle-market IT industry, acted as an advisor to Converge.
  • Also, Converge was advised by the law firm of Holland & Knight.
  • Canaccord Genuity Group served as the exclusive financial advisor to Paragon Development Systems Inc. and Mason Wells.
    • Joe Panettieri

    Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.

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