decor decor
"Nothing is written in stone, as a career is an unpredictable journey."

-Zlatan Ibrahimovic

ConvergeOne to go Public in 2018 Following Merger with Forum

Financial Information*
  • Anticipated Enterprise Value                                                     ~$1.2B
Transaction Facts
  • On December 1, IT services provider ConvergeOne announced that it had entered into a definitive agreement with blank check company Forum Merger Corporation (Nasdaq: FMCI). As a result of the transaction, ConvergeOne will become listed on the Nasdaq with an anticipated initial enterprise value of ~$1.2B.
  • Forum will change its name to ConvergeOne immediately upon close of the transaction, which is expected to occur in the first quarter of 2018.
  • Clearlake Capital Group will remain the largest shareholder in the company following the merger.
On the Fast Lane 
  • $1B Solution Provider: Since being acquired by Clearlake Capital in 2014, ConvergeOne has been expanding at a fast pace. The company catapulted into the billion-dollar solution provider club through its $300M acquisition of SPS in August, which solidified its video business as well as its Cisco and Avaya practices (Cisco and Avaya together comprise ~60 percent of ConvergeOne’s total product sales, while SPS is a Premier Cisco partner and a Platinum Avaya partner). The purchase also advanced the company’s strategy to hone in on managed services and cloud solutions while gaining substantial portfolio expansion. 
  • Active M&A Seeker: ConvergeOne has developed a strong track record of M&A, acquiring 12 different solution providers since 2009. Prior to the most recent SPS acquisition, ConvergeOne, which has a staff size of roughly 800 and over 7,000 customers, also bought IT services company Annese & Associates in July. As a Cisco Gold Certified Partner with public cloud capabilities and 47 years in the IT space, Annese increased ConvergeOne’s presence in the northeastern U.S. Previously, in December 2015, the company purchased cloud computing and data analytics firm SIGMAnet, and in October 2015, purchased managed services and collaboration provider Spanlink.
  • High Risk, High Reward: While going public has become an increasingly riskier move, ConvergeOne will be the latest of several major solution providers that have decided to push forward with an IPO. Earlier this year, Presidio completed an IPO (and also announced a proposed secondary offering in November), while CDW went public in 2013. Additionally, before Optiv was bought out by private equity firm KKR, the security solution provider nearly went public.
  • Growth Opportunities: ConvergeOne anticipates revenue growth from its promising collaboration and cloud services segments. For the fiscal year 2018, ConvergeOne projects collaboration sales of $834M — 69 percent of total revenue. With regards to managed, cloud and maintenance services, the segment is expected to generate $394M in fiscal year 2017 — an increase of 68 percent over last year’s performance.
  • Management Maestro: Chairman and CEO John McKenna, alongside his world-class management team, has formed the foundation for much of ConvergeOne’s success. With a strong eye for strategic M&A, McKenna has demonstrated how a company can continually increase in value through suitable acquisitions. He is well-equipped to lead ConvergeOne through its new form as a publicly traded entity.
For more information about this transaction, click here to read the press release.
*Financial Information from the press release. 
martinwolf was not the advisor in this transaction.
previous post Back to Articles next post

01 Dec 2023

Insight Acquires SADA

Financial Information ($USD) Purchase Price: $410 million cash free debt free Earnout: Up to $390 million with a target of $210 million EV/EBITDA: Approximately 11.3x, based on purchase price plus target earnout and $55 million of EBITDA  Transaction Details Insight Enterprises (NASDAQ: NSIT) today announced it has completed a $410M acquisition of SADA, a leading...

22 Feb 2023

How Microsoft Channel Partners Can Command High Valuations

In today’s rapidly changing ecosystem, simple organic growth doesn’t give Microsoft Channel Partners long-term competitive advantage.   During the last five years, Microsoft Channel Partners have commanded high valuations due to strong and sustainable business models, as well as a track record of profitability. Most were small mid-market businesses that had to decide to be...

18 Jan 2023

IT Industry Titan John McKenna Announces Retirement 

Congratulations to John McKenna, CEO of ConvergeOne, who announced his retirement today after 14 years at the helm. John has been an integral part of the IT industry for more than 30 years, and his leadership, dedication, and hard work have set the gold standard as a titan in our industry.   John’s tenure at...