Under the terms of the agreement Softchoice is paying US$38.1 million in cash to acquire the privately held company with a deferred payment of up to US $9 million, payable during 2008 depending on the financial performance of Optimus Solutions. On a trailing 12-month basis, Optimus Solutions generated US$140 million in revenue. Approximately 40 percent of Optimus’ revenue during this period was derived from the enterprise market segment, 50 percent from the mid-market segment and 10 percent from the public sector. Approximately 87 percent of this revenue is from hardware sales, 7 percent is attributable to the sale of software, and the remainder from services. Optimus employs 100 people and services 1500 customers with no single customer representing more than 12 percent of total revenues. Softchoice expects the transaction will be accretive to earnings in 2008. Funding for the transaction was provided by a loan from a Canadian chartered bank.
The acquisition significantly enhances Softchoice’s ability to provide advanced hardware technology solutions and services, including internetworking, server consolidation, and security solutions to U.S. mid-market, enterprise and public sector organizations.
Benefits from the transaction include the following:
Completes Softchoice’s market coverage by enabling the Company to deliver hardware solutions across all U.S. market segments;
Extends Softchoice’s Microsoft Enterprise Agreement expertise, virtual supply chain technology and TechCheck assessment services to Optimus Solutions’ customer base;
Broadens Softchoice’s customer platform in the U.S. and supports the Company’s overall strategic plan to grow its market share along three dimensions - (1) in both hardware and software sales; (2) in Canada and the U.S.; (3) and across the mid-market, enterprise and public sector segments.
Softchoice’s success as a leading technology provider in Canada and to the U.S. mid-market coupled with strategic investments in its high velocity supply chain has laid the foundation for the current phase of the Company’s growth strategy. Since October 2007, Softchoice has leveraged selective acquisitions to increase its reach in key market segments and enhance customer value. On October 12th 2007, Softchoice acquired the Technology Solutions and Professional Services divisions of NexInnovations, a Canadian-based enterprise solutions provider. Two months later, on December 11th, Softchoice completed the acquisition of Software Plus, the ninth largest Microsoft LAR in the U.S. and a leading provider to enterprise and academic organizations. The acquisition of Optimus Solutions complements these previous transactions in terms of market focus and regional presence. Management believes the transaction will strengthen Softchoice’s ability to serve the hardware technology requirements of U.S.-based enterprise and public sector organizations while providing the opportunity to extend the Company’s expertise in IT assessments and software licensing to an entirely new set of customers.
The management team is pleased to report that Steve Johnson will carry on in his capacity as President of Optimus Solutions for a minimum of two years. [January 4, 2008]
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