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Converge Technology Solutions Corp
Symbol CTS
Shares Issued 210,457,581
Close 2021-10-14 C$ 9.82
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Converge's Portage closes $35M private placement

2021-10-14 15:38 ET - News Release

Mr. Shaun Maine reports

CONVERGE TECHNOLOGY SOLUTIONS CORP. ANNOUNCES THE CLOSING OF PORTAGE CYBERTECH NON BROKERED PRIVATE PLACEMENT

Portage CyberTech Inc., Converge Technology Solutions Corp.'s recently formed cybersecurity-focused software-as-a-service (SaaS) entity, has closed a non-brokered private placement. Portage CyberTech issued 43.75 million common shares at a price of 80 cents per common share for gross proceeds to Portage of $35-million. Upon completion of the private placement, Converge owns approximately 53 per cent of Portage CyberTech, based on a $75-million valuation following completion of the private placement.

Portage CyberTech is a new cybersecurity-focused SaaS entity that combines 100-per-cent of Converge's existing Becker-Carroll and Vivvo business units. Portage CyberTech enables governments and enterprises to securely offer digital services to their citizens and customers and better protect identities and private data sharing. Portage CyberTech's products enable the ability to expand digital services, streamline data sharing, drive down costs and simplify the end-customer experience with exceptional time to service.

The creation of Portage is a result of Converge's strategy to unlock and create shareholder value in high-growth markets. Converge recognizes that SaaS businesses have distinct research and development and marketing economics and Portage CyberTech intends to pursue a liquidity event (including through a public listing of Portage CyberTech shares) for all shareholders as it scales up to address its high-growth market. An intercompany partner agreement between Converge and Portage CyberTech will support international customer engagements for a range of hosting options, including 24/7 support, so customers can benefit from Converge's highly successful cross-selling and go-to-market strategies. Portage CyberTech intends to use the net proceeds from the private placement for acquisitions and other general corporate purposes. Don Cuthbertson has been appointed the chief executive officer of Portage CyberTech.

Shaun Maine and Mr. Cuthbertson, Converge's chief executive officer and chief technology officer, respectively, have subscribed for Portage CyberTech common shares under the private placement. Such transactions are considered to be related-party transactions within the meaning of Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions) of the Canadian Securities Administrators. Such transactions are exempt from the valuation and minority approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(a) of MI 61-101, respectively.

About Converge Technology Solutions Corp.

Converge Technology Solutions is a software-enabled IT (information technology) and 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 multifaceted approach enables Converge to address the unique business and technology requirements for all clients in the public and private sectors.

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