Mr. Andrew Caprara reports

SOFTCHOICE CORPORATION AND WORLD WIDE TECHNOLOGY ENTER INTO DEFINITIVE AGREEMENT FOR SOFTCHOICE TO BE ACQUIRED BY WORLD WIDE TECHNOLOGY AT A PRICE OF C$24.50 PER SHARE

Softchoice Corp. and World Wide Technology Holding Co. LLC (WWT), a global technology solutions and services provider, have entered into an arrangement agreement for Softchoice to be acquired by WWT, through an all-cash transaction, which values Softchoice at an enterprise value (EV) of approximately $1.8-billion. Shareholders, including each of the directors and senior officers of Softchoice, which collectively represent approximately 51.3 per cent of Softchoice's issued and outstanding common shares, have entered into voting support agreements pursuant to which such shareholders have agreed, among other things, to support and to vote all shares held by them in favour of the transaction.

Andrew Caprara, president and chief executive officer of Softchoice, commented on the announcement: "We are excited to join WWT. Its scale and global reach, customer base of large organizations and industry-leading infrastructure solutions are a perfect complement to our software and cloud-focused solutions, our Canadian presence, and our strength in the North American mid-market. We also share similar Great Place to Work certified organizational cultures, demonstrating an aligned passion for our people. I believe WWT is the ideal partner for our customers and employees and I'm excited about our future as a combined firm."

Jim Kavanaugh, co-founder and chief executive officer of WWT, noted: "As the AI [artificial intelligence] revolution reshapes industries and transforms businesses worldwide, we are at the forefront of this change -- leading by empowering enterprises of all sizes to achieve better business outcomes. Softchoice has been a transformative player in the IT [information technology] industry for over 35 years, and adding its complementary software, cloud, cybersecurity and AI capabilities to WWT's portfolio will enable us to create even greater value for our clients striving to achieve their digital transformation goals."

David Steward, founder and chairman of WWT, added: "This acquisition strengthens our access to commercial, small and medium business customers while expanding WWT's position in the U.S., Canada and around the world. Given our shared mission and Great Place to Work designations, we will continue our commitment to building a culture of innovation and inclusion to be a great place to work for all."

Transaction highlights

Under the terms of the arrangement agreement, WWT, through an affiliate, will acquire all the issued and outstanding common shares of Softchoice for a price of $24.50 per share, in cash, valuing the company at an EV of approximately $1.8-billion. This price represents premiums of approximately 14 per cent, 32 per cent and 19 per cent, to the closing price of the shares on the Toronto Stock Exchange on Dec. 30, 2024, the closing price of the shares on the TSX on Sept. 23, 2024, the day prior to commencement of the review process, and the 90-day volume-weighted average price, respectively. The purchase price is also above the 52-week-high closing price of the common shares as of Dec. 30, 2024, and represents a total shareholder return of approximately 62 per cent to the company's initial public offering price of $20, as adjusted for Softchoice's historical dividend payments. Based on the company's reported financial results for the trailing 12 months to Sept. 30, 2024, the consideration values the company at an EV to adjusted EBITDA multiple of approximately 13.2 times.

Transaction details

The company entered into the arrangement agreement based on the unanimous approval of the company's board of directors, following receipt of the unanimous recommendation of a committee of independent directors and having determined that the transaction is in the best interests of the company and is fair to the shareholders of the company. The arrangement agreement was the result of a comprehensive solicitation and negotiation process that was undertaken at arm's length with the oversight and participation of the special committee advised by highly qualified legal and financial advisers. See "Unanimous board approval" below.

The transaction will be implemented by way of a statutory plan of arrangement under the Canada Business Corporations Act. Implementation of the transaction will be subject to, among other things, the approval at the special meeting of shareholders of: (i) at least 66-2/3rds per cent of the votes cast by shareholders; and (ii) a simple majority of the votes cast by shareholders (excluding common shares held by certain senior officers of the company, whose shares are required to be excluded pursuant to Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions). The company intends to hold the shareholder meeting in March, 2025, where the transaction will be considered and voted upon by shareholders of record. The transaction is also subject to court approval and customary closing conditions, including receipt of key regulatory approvals, is not subject to any financing condition and, assuming the timely receipt of all required key regulatory approvals, is expected to close in late Q1 or early Q2 2025.

A termination fee of $49-million would be payable by Softchoice in certain circumstances, including in the context of Softchoice entering into a definitive agreement with respect to a superior proposal.

Birch Hill Equity Partners and each of the directors and senior officers of the company, representing approximately 51.3 per cent of the outstanding shares of Softchoice, have entered into voting support agreements, under which they have agreed, among other things, to support and to vote all shares held by them in favour of the transaction. The voting support agreements terminate automatically upon termination of the arrangement agreement.

Following completion of the transaction, it is expected that the outstanding shares will be delisted from the TSX and that Softchoice will cease to be a reporting issuer in all applicable Canadian jurisdictions.

Unanimous board approval

In making its determination to unanimously recommend approval of the transaction to the board, the special committee and, in the board's determination to approve the transaction, the board considered, among other things, the following reasons for the transaction:

• All-cash consideration providing certainty of value and liquidity: The all-cash consideration is not subject to any financing condition and provides Softchoice's shareholders with certain and immediate value and liquidity.
• Compelling value: The implied valuation multiple on the transaction of 13.2 times compares favourably with transactions in the software and technology sector as well as the current trading value of Softchoice's Canadian and other globally publicly listed peers and their corresponding implied multiples based on prevailing equity research analyst consensus estimates for both the company and its peers.
• Fairness opinions: The board has received fairness opinions from each of TD Securities Inc. and RBC Dominion Securities Inc. and the special committee has received an independent fairness opinion from Origin Merchant Partners, which each concluded that, based upon and subject to the assumptions, limitations and qualifications set out in their respective opinions, that the consideration to be received by shareholders of Softchoice pursuant to the transaction is fair, from a financial point of view, to such shareholders.
• Arrangement agreement terms: The arrangement agreement is the result of a comprehensive negotiation process that was undertaken at arm's length with the oversight and participation of the special committee advised by highly qualified legal and financial advisers and resulted in terms and conditions that are reasonable in the judgment of the special committee and the board, including customary fiduciary-out rights that would enable the company to enter into a definitive agreement with respect to an unsolicited proposal that constitutes a superior proposal (as defined in the arrangement agreement) in certain circumstances.
• Robust review process: Following the receipt of unsolicited inquiries from third parties, the company was marketed widely to potential strategic and financial counterparties in connection with a review process conducted by the board and the special committee, which did not surface any proposal superior to the transaction.
• Ability to respond to superior proposal: Subject to compliance with the arrangement agreement, the board, in certain circumstances until shareholder approval is obtained, is able to consider, accept and enter into a definitive agreement with respect to an unsolicited proposal that constitutes a superior proposal. The voting support agreements automatically terminate upon, among other circumstances, the company entering into a definitive agreement with respect to a superior proposal. The termination fee payable by the company of $49-million is reasonable in the circumstances and only payable in customary and limited circumstances.
• Support for the transaction: Birch Hill, the company's largest shareholder, as well as each director and senior officer of the company have entered into voting support agreements, pursuant to which such shareholders have agreed, among other things, to support and to vote all shares held by them in favour of the transaction. Collectively, such shareholders represent approximately 51.3 per cent of the outstanding common shares of Softchoice.

Fairness opinions

TD Securities and RBC Capital Markets and Origin orally delivered fairness opinions to the board and the special committee, respectively, to the effect that, as of Dec. 30, 2024, subject to the assumptions, limitations and qualifications communicated to the company and to be contained in the TD Securities, RBC Capital Markets and Origin written fairness opinions, the consideration to be received by shareholders pursuant to the arrangement agreement is fair, from a financial point of view, to such shareholders.

Copies of the fairness opinions as well as additional details regarding the terms and conditions of the transaction and the rationale for the recommendation made by the board of directors will be set out in the management proxy circular to be mailed to shareholders in connection with the shareholder meeting and filed by the company on its profile on SEDAR+.

Important additional information and where to find it

In connection with the transaction, Softchoice intends to file relevant materials on its profile on SEDAR+. Shareholders will be able to obtain these documents as well as other filings containing information about Softchoice, the transaction and related matters, without charge from SEDAR+.

Advisers

TD Securities is acting as lead financial adviser to the company and RBC is acting as co-lead financial adviser to the company. Origin is acting as an independent financial adviser to the board of directors. Stikeman Elliott LLP is acting as legal adviser to the company.

BDT & MSD and BofA Securities are acting as financial advisers to WWT while Blake Cassels & Graydon LLP and Bryan Cave Leighton Paisner LLP are acting as legal advisers to WWT.

About Softchoice Corp.

Softchoice is a software and cloud-focused IT solutions provider that equips organizations to be agile, innovative and secure and people to be engaged, connected and creative at work. The company does this by delivering secure, AI-powered cloud and digital workplace solutions supported by its advanced software asset management methodology and capabilities. Through the company's customer success framework, Softchoice creates value for its customers by reducing their IT spending, optimizing their technology and supporting business-driven innovation. Softchoice is a highly engaged, high-performing team that is welcoming, inclusive and diverse in thought and experience and is certified as a Great Place to Work in Canada and the United States.

About World Wide Technology Holding Co. LLC

Founded in 1990, World Wide Technology, a global technology solutions provider leading the AI and digital revolution, with $20-billion in annual revenue, combines the power of strategy, execution and partnership to accelerate digital transformational outcomes for large public and private organizations around the world. Through its advanced technology centre, a collaborative ecosystem of the world's most advanced hardware and software solutions, WWT helps customers and partners conceptualize, test and validate innovative technology solutions for the best business outcomes and then deploys them at scale through its global warehousing, distribution and integration capabilities.

With nearly 10,000 employees and more than 55 locations around the world, WWT's culture, built on a set of core values and established leadership philosophies, has been recognized 13 years in a row by Fortune and Great Place to Work for its unique blend of determination, innovation and leadership focus on diversity and inclusion. With this culture at its foundation, WWT bridges the gap between business and technology to make a new world happen for its customers, partners and communities.

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