Highlights:

  • WWT assists enterprises in migrating applications to the cloud, implementing artificial intelligence models, and executing various other IT projects.
  • WWT says the acquisition will boost its presence in Canada and the U.S. mid-market, while enhancing its cloud, cybersecurity, and AI capabilities.

Recently, World Wide Technology planned to acquire Softchoice Corp. for 1.8 billion Canadian dollars, approximately 1.25 billion USD.

The all-cash deal values Toronto-based Softchoice at C$24.5 per share, representing a premium of over 10% compared to its closing recent price and 62% above its initial public offering price in 2021.

Based in St. Louis, Missouri, WWT is a leading provider of information technology services with annual revenues of approximately USD 20 billion. The company supports enterprises in migrating applications to the cloud, deploying artificial intelligence models, and executing various IT projects. It also constructs small-scale test data centers, allowing customers to trial new technologies before integrating them into their production environments.

Softchoice also offers IT services but with a more specialized focus. Majority of its revenue comes from three key areas: cloud, digital workplace, and software management projects.

Softchoice’s cloud division assists businesses in migrating on-premises applications to infrastructure-as-a-service platforms. It also enhances the performance and security of workloads already operating in off-premises environments. The Software & Cloud segment accounts for more than two-thirds of the company’s total revenue.

Softchoice’s digital workplace division, its second-largest revenue stream, assists enterprises in implementing technologies that enhance employee productivity. Its third key business area, the software management unit, oversees organizations’ software licenses, identifying unused licenses and instances where applications may be used in violation of developer terms.

Softchoice reported gross sales of C$628.6 million in the last quarter, reflecting a 20.3% year-over-year increase. The company caters to more than 5,000 organizations, mainly small and midsize businesses with annual revenues of up to C$10 million.

WWT stated that the acquisition would strengthen its market presence in Canada and the U.S. mid-market segment. Additionally, Softchoice is anticipated to enhance WWT’s capabilities in cloud, cybersecurity, and artificial intelligence.

Founder and Chairperson of WWT, David Steward said, “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.”

Investors holding 51.3% of Softchoice’s outstanding shares have pledged their support for the proposed acquisition. However, the terms of the deal permit Softchoice to explore more competitive offers before finalizing the transaction. If no better bid is secured, the acquisition is expected to close in the first or second quarter of 2025, subject to regulatory approval.