공시 • Apr 23
Mainline Information Systems, Inc. completed the acquisition of Converge Technology Solutions Corp. (TSX:CTS) from a group of shareholders.
Mainline Information Systems, Inc. entered into a non-binding letter of intent to acquire Converge Technology Solutions Corp. (TSX:CTS) from a group of shareholders for CAD 1.2 billion on December 31, 2024. Mainline Information Systems, Inc. entered into an arrangement agreement to acquire Converge Technology Solutions Corp. (TSX:CTS) from a group of shareholders on February 6, 2025. Under the terms of the Arrangement Agreement, Mainline Information Systems agreed to acquire all of the issued and outstanding common shares, for CAD 5.50 per Common Share in cash, other than Common Shares held by certain shareholders who enter into rollover equity agreements. As of April 1, 2025, Mainline Information Systems, Inc. has agreed to amend (the "Amendment") the previously announced arrangement agreement with an affiliate of H.I.G. Capital, whereby H.I.G has agreed to acquire all of the issued and outstanding common shares of the Company. Under the terms of the Amendment, shareholders will receive CAD 6.00 per Common Share in cash (up from CAD 5.50 per Common Share), other than Common Shares held by certain shareholders who enter into rollover equity agreements. As part of entering into the Amendment, the Company and H.I.G. have also agreed to permanently discontinue the court proceedings and the Company has agreed to discontinue its discussions with the Third Party. Upon completion of the Transaction, the Company intends to apply to delist the Common Shares from all public markets and cease to be a reporting issuer under Canadian securities laws. The Rollover Shareholders will roll certain of their Common Shares in the Company for equity interests in an affiliated entity of H.I.G. All rollovers will occur at a value per Common Share equal to the cash purchase price of CAD 6. A termination fee of CAD 34.4 million would be payable by Converge in certain circumstances, including in the context of Converge entering into a definitive agreement with respect to a superior proposal. The reverse termination fee payable to Converge Technology Solutions is $36.4 million (approximately CAD 53 million). Following the closing, Converge Chief Executive Officer Greg Berard will serve as Chief Executive Officer of the combined business and Mainline President and Chief Executive Officer Jeff Dobbelaere will serve as President.
The Transaction, which was unanimously approved by the Board of Directors of Converge (the "Board") (with an interested director abstaining from voting), after receiving the unanimous recommendation from a special committee of independent directors (the "Special Committee"), is to be carried out by way of a statutory court-approved plan of arrangement under the Canada Business Corporations Act, and will require approval of two-thirds of the votes cast by shareholders of the Company at a special meeting of the shareholders of the Company (the "Special Meeting"); and (ii) a simple majority of the votes cast by shareholders of the Company at the Special Meeting, excluding votes from Rollover Shareholders and any other required to be excluded as required under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. In addition to shareholder approval, the completion of the Transaction will be subject to court and regulatory approvals and clearances, as well as other customary closing conditions. Subject to the satisfaction of such conditions, the Transaction is expected to be completed during the second quarter of 2025. Converge Technology shareholders approved the transaction at special meeting will be held on April 10, 2025 and now Converge will seek a final order of the Ontario Superior Court of Justice (Commercial List) to approve the Arrangement at a hearing expected to be held on April 16, 2025. As of April 16, 2025, Converge Technology Solutions Corp. announced that the Ontario Superior Court of Justice has issued a final order approving the transaction and the Company also announced that all regulatory approvals necessary for completion of the Arrangement have now been obtained. The Arrangement is expected to be completed on or about April 22, 2025.
Myles Hiscock and J.P. Michaud of Canaccord Genuity Corp. is acting as lead financial advisor as well as fairness opinion provider to the Company and its Board. Houlihan Lokey Capital, Inc. is engaged as financial advisor to the Special Committee. Origin Merchant Partners was engaged as an independent financial advisor and provided a fairness opinion to the Special Committee. David Coll-Black and Michael Partridge of Goodmans LLP is acting as legal counsels to the Company. Tana Ryan, Nav Rekhi, Emilie Cloarec, Benton Lewis, Justina Chen, Noah Beck, Amanda Rotkel, Rebecca Sivitz, Max Scott, Olivia J. Greer, Ariel Kronman, John O'Loughlin, Ariel Fliman, Carla Hine, Dan Nobil, Neil Rigby (London, Brussels), Mark Taylor (London), Barbara Jagersberger (Munich) and Konstantin Hoppe (Munich) of Weil, Gotshal & Manges LLP and Evan Marcus and Colin Burn of Stikeman Elliott LLP are acting as legal advisors to H.I.G., parent company of Mainline. McCarthy Tétrault LLP acted as legal counsel for Converge Technology Solutions. The Laurel Hill Advisory Group LLC acted as proxy solicitor and Computershare Investor Services Inc. acted as Transfer Agent for Converge Technology Solutions. In connection with these services, Laurel Hill will receive CAD 100,000, plus reasonable out-of-pocket expenses. Guggenheim Securities, LLC acted as financial advisor to H.I.G. J.P. Morgan Securities LLC acted as financial advisor to H.I.G. Lazard Freres & Co. LLC acted as financial advisor to H.I.G. BMO Nesbitt Burns Inc. acted as financial advisor to H.I.G.
Mainline Information Systems, Inc. completed the acquisition of Converge Technology Solutions Corp. (TSX:CTS) from a group of shareholders on April 22, 2025. The Shares are expected to be de-listed from the Toronto Stock Exchange after the end of trading day on April 23, 2025, and will be subsequently removed from the OTCQX Best Market and the Frankfurt Stock Exchange.