Get Breaking Alerts on Stocks Before The Mainstream Media

Stay informed of the biggest news on stocks so you can react before 90% of retail investors.
Email address
We guarantee you to keep your privacy
Connect with us
Financial Press
Converge Technology Solutions (CNW Group/Converge Technology Solutions Corp.)

Tech

Converge Technology Solutions Corp. Acquires REDNET AG

REDNET AG’s acquisition marks the onset of Converge’s previously announced European expansion.

TORONTO and GATINEAU, QC, Aug. 5, 2021 /CNW/ – Converge Technology Solutions Corp. (“Converge” or “the Company“) (TSX: CTS) (FSE: 0ZB) (OTCQX: CTSDF) a software-enabled IT & Cloud Solutions provider, is pleased to announce that it has completed the acquisition of 75% interest in REDNET AG, an IT services provider headquartered in Mainz, Germany. REDNET is the 23rd acquisition announced by Converge and the Company’s first European acquisition.

Founded in 2004, REDNET AG specializes in serving education, healthcare, and government/public sectors, providing detailed advice, economic planning, smooth logistics, and fast service to their clients. Particularly, the organization prides themselves on bringing value through comprehensive, high-quality services and extensive know-how in handling large rollouts. With a heavy focus on the environment and sustainability initiatives, REDNET AG also engages in a 360-degree, holistic approach to increasing IT life cycles through flexible maintenance concepts, while simultaneously focusing on environmental compatibility.

“We are excited to announce Converge’s acquisition of REDNET AG,” stated Shaun Maine, CEO of Converge. “The addition of REDNET AG is significant, as it marks Converge’s official expansion into Europe and will greatly increase our ability to serve clients globally. From infrastructure, to service, to operations & logistics, REDNET AG’s strong capabilities and offerings in the public sector will both enhance Converge’s current services and strengthen our global footprint.”

“I am pleased to have Converge as a strong partner at our side, with whom we will jointly continue the REDNET success story throughout Germany. Our range of products and services will become even more attractive as a result. As a group of companies, we offer our public customers in Germany a comprehensive portfolio from a single source,” said Barbara Weitzel, CEO of REDNET AG.  

Consideration for the acquired interest represented approximately €96 million paid in cash at closing, plus an adjustment representing 75% of excess working capital at closing. In addition, Converge receives its pro rata share of the economic benefit earned by the business commencing January 1, 2021. The purchase price for the acquired interest represents a multiple of approximately 8 times REDNET AG’s projected 2021 EBITDA of €16 million and just over 5 times REDNET’s projected 2022 EBITDA of €24 million. The purchase price paid on closing was financed by Converge’s recent bought deal public offering of common shares, as well as Converge’s revolving credit facility. The purchase agreement allows for Converge to acquire the remaining 25% of REDNET after three years.

REDNET AG marks the twenty-first acquisition completed by Converge since October 2017. Converge’s family of companies also includes Corus Group, LLC; Northern Micro, Inc.; 10084182 Canada Inc. operating as Becker-Carroll; Key Information Systems, Inc.; BlueChip Tek, Inc.; Lighthouse Computer Systems, Inc.; Software Information Systems LLC.; Nordisk Systems, Inc.; Essex Technology Group, Inc.; Datatrend Technologies, Inc.; VSS, LLC; Solutions PCD, Inc.; Unique Digital, Inc.; Workgroup Connections, Inc.; Vivvo Application Studios LTD.; Vicom Computer Services, Inc.; CarpeDatum LLC; Accudata Systems, Inc.; Dasher Technologies, Inc.; and ExactlyIT, Inc. In June 2021, Converge also announced it has signed definitive agreements to acquire Vicom Infinity, Inc. and Infinity Systems Software, Inc.

Get Breaking Stock Alerts

Stay informed of the biggest news on stocks so you can react before 90% of retail investors.
Email address
We are Spam free & Secure 🙂

About REDNET AG
Detailed advice, economic planning, smooth logistics and fast service – REDNET has been advising authorities and educational institutions as a specialized IT outfitter for many years. The company, based in Mainz, Germany is valued as a reliable and competent partner and maintains important hardware framework agreements such as with the Rhineland-Palatinate State Office for Data and Information (LDI), the Hessian ekom21, and the Johannes Gutenberg University Mainz. In addition to many years of experience in the market for public clients, REDNET AG customers particularly value comprehensive, high-quality services and extensive know-how in handling large rollouts.

For more information, visit rednet.ag.

About Converge
Converge Technology Solutions Corp. is a software-enabled IT & Cloud Solutions provider focused on delivering industry-leading solutions and services. Converge’s regional sales and services organizations deliver advanced analytics, cloud, and cybersecurity offerings to clients across various industries. The Company supports these solutions with managed services, digital infrastructure, and talent expertise offerings across all major IT vendors in the marketplace. This multi-faceted approach enables Converge to address the unique business and technology requirements for all clients in the public and private sectors.

For more information, visit convergetp.com.

Forward-Looking Statements
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. Forward–looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward–looking statements. Except as required by law, Converge assumes no obligation to update the forward–looking statements of beliefs, opinions, projections, or other factors, should they change. The reader is cautioned not to place undue reliance on forward–looking statements. For a detailed description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company’s annual information form, which is available on SEDAR under the Company’s profile at www.sedar.com, and the consolidated financial statements of the Company for the years ended December 31, 2020 and 2019, together with the corresponding Management’s Discussion and Analysis for additional risk factors described under “Risks and Uncertainties”.

SOURCE Converge Technology Solutions Corp.

For further information: Converge Technology Solutions Corp.: Email: investors@convergetp.com, Phone: 416-360-1495

Written By

Client Relations

Click to comment

Leave a Reply

Your email address will not be published.

Related Articles

Get Breaking Stock Alerts

Stay informed of the biggest news on stocks so you can react before 90% of retail investors.
Email address
We are Spam free & Secure :)

Get Breaking Stock Alerts

Email address

Get Breaking Stock Alerts

Stay informed of the biggest news on stocks so you can react before 90% of retail investors.
Email address