Converge Technology Solutions and H.I.G. Capital Agree to Amend Arrangement Agreement

Rhea-AI Summary

Converge Technology Solutions (CTSDF) has amended its arrangement agreement with H.I.G. Capital, increasing the cash offer from C$5.50 to C$6.00 per common share. This amendment follows a series of events including an unsolicited proposal from a third party on March 7, 2025, offering C$6.00 per share, and subsequent legal proceedings initiated by H.I.G. Capital.

The third party later submitted a binding proposal at C$6.00 and subsequently increased it to C$6.10 per share. However, the Board unanimously determined that accepting H.I.G.'s amended C$6.00 per share offer was in the company's best interests, citing transaction certainty and timeline advantages.

The special shareholders' meeting to approve the arrangement is scheduled for April 10, 2025, with the transaction expected to complete around April 17, 2025.

Positive

• Increased acquisition price from C$5.50 to C$6.00 per share
• Clear timeline for transaction completion
• Unanimous board approval provides strong shareholder guidance

Negative

• Accepted lower offer (C$6.00) compared to competing bid (C$6.10)
• Legal complications with H.I.G. Capital required court intervention

TORONTO and GATINEAU, QC, April 1, 2025 /PRNewswire/ - Converge Technology Solutions Corp. ("Converge" or the "Company") (TSX: CTS) (FSE: 0ZB) (OTCQX: CTSDF) announced today that the Company has agreed to amend (the "Amendment") the previously announced arrangement agreement dated February 6, 2025 (the "Arrangement Agreement") with an affiliate of H.I.G. Capital ("H.I.G."), whereby H.I.G has agreed to acquire all of the issued and outstanding common shares (the "Common Shares") of the Company (the "Arrangement"). Under the terms of the Amendment, shareholders will receive C$6.00 per Common Share in cash (up from C$5.50 per Common Share), other than Common Shares held by certain shareholders who enter into rollover equity agreements. Defined terms used herein that are not otherwise defined have the meaning given to them in the Arrangement Agreement.

On March 7, 2025, Converge received an unsolicited, conditional, non-binding proposal (the "Unsolicited Proposal") to acquire 100% of the Common Shares for cash consideration of C$6.00 per share from a credible third party (the "Third Party"). Consistent with its fiduciary duties, the board of directors of Converge (the "Board"), in consultation with its legal and financial advisors and a special committee of independent directors, confidentially considered and determined that the Unsolicited Proposal was a bona fide Acquisition Proposal that constitutes, or could reasonably be expected to constitute or lead to, a Superior Proposal.

On March 25, 2025, H.I.G. commenced a proceeding in the Ontario Superior Court of Justice (Commercial List) (the "Court") claiming that Converge had, in engaging with the Third Party regarding the Unsolicited Proposal, breached certain provisions of the Arrangement Agreement and was therefore not permitted to accept or approve a Superior Proposal (if received) from the Third Party, or to enter into a definitive agreement with respect to any such Superior Proposal. By order of the Court, Converge was prohibited from making public disclosure of H.I.G.'s allegations. Converge denied such claims, rejected H.I.G.'s positions and undertook a vigorous defence of its position.

On March 31, 2025, Converge received an unsolicited, binding all-cash Acquisition Proposal from the Third Party at a price of C$6.00 per Common Share (the "Original Binding Proposal"). Following Converge's receipt of the Original Binding Proposal, H.I.G. advised Converge that it was prepared to enter into the Amendment to increase the cash price under the Arrangement to C$6.00 per Common Share. On April 1, 2025, shortly before the Board determined to enter into the Amendment, the Third Party submitted an amended binding Acquisition Proposal in which the price per Common Share was increased by 1.7% to C$6.10 per share (the "Amended Binding Proposal").

After carefully considering the Amended Binding Proposal and the Amendment, the Board unanimously (with an interested director abstaining), upon the recommendation of the special committee, and in consultation with its legal and financial advisors, determined that entering into the Amendment was in the best interests of the Company. In making their determination, the Board and the special committee considered, among other things, (i) that the Amendment offers shareholders of the Company a high degree of certainty of a completed transaction on a very short timeline at a price per Common Share that is significantly higher than the original C$5.50 price under the Arrangement and equal to the price offered under the Original Binding Proposal; and (ii) the benefits of such relative certainty to the business and the Company's stakeholders, including its employees, customers and vendors. As part of entering into the Amendment, the Company and H.I.G. have also agreed to permanently discontinue the court proceedings described above and the Company has agreed to discontinue its discussions with the Third Party.

The Board unanimously (with an interested director abstaining) reiterates its recommendation that Shareholders vote FOR the Arrangement Resolution (as defined herein).

The Arrangement and Meeting Details

As originally planned, Converge will hold the special meeting of shareholders (the "Meeting") to consider a special resolution to approve the Arrangement (the "Arrangement Resolution") on April 10, 2025, at 11:00 a.m. (Toronto time) in a virtual-only meeting format. The Meeting will be held online at https://meetnow.global//MWUKHQ6, with the ability to participate electronically as explained further in the Circular. Only Shareholders of record as of the close of business on March 10, 2025 are entitled to receive notice of, attend, participate and vote at, the Meeting. The Arrangement is expected to be completed on or about April 17, 2025.

About Converge
Converge Technology Solutions Corp. is reimagining the way businesses think about IT—a vision driven by people, for people. Since 2017, we've focused on delivering outcomes-driven solutions that tackle human- centered challenges. As a services-led, software-enabled, IT & Cloud Solutions provider, we combine deep expertise, local connections, and global resources to deliver industry-leading solutions.

Through advanced analytics, artificial intelligence (AI), cloud platforms, cybersecurity, digital infrastructure, and workplace transformation, we empower businesses across industries to innovate, streamline operations, and achieve meaningful results. Our AIM (Advise, Implement, Manage) methodology ensures solutions are tailored to our customers' specific needs, aligning with existing systems to drive success without complexity.

Discover IT reimagined with Converge—where innovation meets people. Learn more at convergetp.com.

Forward-Looking Information

This press release contains certain "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of applicable Canadian securities legislation regarding Converge and its business. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected" "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts". "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.

Specifically, statements regarding the Amendment, the anticipated timing of the Meeting and the completion of the transactions contemplated thereby and other statements that are not statements of historical facts are considered forward-looking information. The anticipated dates indicated may change for a number of reasons, including the necessity to extend the time limits for satisfying the other conditions for the completion of the Arrangement. The forward-looking information are based on management's opinions, estimates and assumptions. While these opinions, estimates and assumptions are considered by the Company to be appropriate and reasonable in the circumstances as of the date of this press release, they are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, levels of activity, performance, or achievements to be materially different from those expressed or implied by such forward-looking information.

The forward looking information are subject to significant risks including, without limitation: risks relating to the completion of a transaction with H.I.G., including receipt of all necessary regulatory, court, and shareholder approvals; and general economic conditions.

If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information. Although the Company has attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward- looking information, there may be other risk factors not presently known to the Company or that the Company presently believes are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information.

There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, you should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward- looking information contained in this press release represents the Company's expectations as of the date specified herein, and are subject to change after such date. However, the Company disclaims any intention or obligation or undertaking to update or revise any forward-looking information or to publicly announce the results of any revisions to any of those statements, whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

All of the forward-looking information contained in this press release is expressly qualified by the foregoing cautionary statements.

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SOURCE Converge Technology Solutions Corp.

FAQ

What is the new acquisition price per share for Converge Technology Solutions (CTSDF)?

H.I.G. Capital has increased its cash offer to C$6.00 per common share, up from the original C$5.50 per share.

When is the Converge Technology Solutions (CTSDF) shareholder meeting for the H.I.G. acquisition?

The special shareholders' meeting is scheduled for April 10, 2025, at 11:00 a.m. (Toronto time) in a virtual format.

What was the competing offer for Converge Technology Solutions (CTSDF)?

A third party submitted a binding proposal of C$6.10 per share, which was 1.7% higher than H.I.G.'s amended offer.

When is the expected closing date for the H.I.G. acquisition of Converge Technology Solutions (CTSDF)?

The arrangement is expected to be completed on or about April 17, 2025.

Why did Converge Technology Solutions (CTSDF) accept H.I.G.'s lower offer over the third party's higher bid?

The Board cited greater certainty of completion and shorter timeline as key factors in accepting H.I.G.'s offer, benefiting stakeholders including employees, customers, and vendors.