Converge: reverse takeover to take-private

What is Converge and why does it matter to a small holding company?

Converge was incorporated in Ontario on November 29, 2016 and, by the company's August 2018 release, had bought five North American businesses: Corus Group (October 2017), Northern Micro (November 2017), Becker-Carroll (January 2018), and Key Information Systems and BlueChipTek. It then used a capital pool company, a listed shell on the TSX Venture Exchange, to become public. The company later raised equity repeatedly on that listing and acquired more businesses.

It matters because it shows an acquirer using each public step for a purpose: a small listing to start, a larger exchange to raise more, and a sale to a private-equity buyer at the end. It also shows the cost side: a net loss in 2024 and a sale in which a second bidder made a competing offer.

What did it do, by the numbers?

Listing steps:

• Reverse takeover. The TSX Venture Exchange bulletin says Norwick completed its qualifying transaction with Converge on November 7, 2018 and describes it as a reverse takeover in which Converge's shareholders gained control. Norwick issued 74,355,034 shares to them, consolidated its shares 3.2 for 1, renamed itself Converge Technology Solutions Corp., and had 75,683,159 shares outstanding afterward. Trading under CTS began November 13, 2018.
• Equity raises. A bought deal announced November 18, 2020 offered 13,400,000 shares at C$3.00, gross proceeds C$40.2 million. The company reported C$109 million of equity raised in 2020, then C$86.5 million at C$4.85 in January 2021, and about C$518.0 million of gross proceeds from three bought deals in 2021.
• TSX graduation. February 11, 2021.

Results, in Canadian dollars, as reported:

• 2019. Revenue C$687.8 million. Adjusted EBITDA C$31.6 million. Net loss C$10.8 million.
• 2020. Revenue C$948.8 million, up 38%. Adjusted EBITDA C$60.5 million. Net loss C$4.2 million. Five acquisitions closed.
• 2021. Revenue C$1,527.8 million, up 61%. Adjusted EBITDA C$94.0 million. Nine acquisitions closed. The release prints the revenue as billions, which looks like a typo, since 61% growth on C$948.8 million gives about C$1,528 million.
• 2023. Revenue C$2,705.2 million. Adjusted EBITDA C$170.3 million. Net loss C$6.4 million.
• 2024. Revenue C$2,592.1 million. Adjusted EBITDA C$167.3 million. Net loss C$181.0 million, including a C$176.1 million non-cash impairment on its Germany segment. Net debt C$113.4 million.

What worked, or what went wrong?

• Growth was real and fast. Revenue rose from C$687.8 million to C$2,705.2 million in four years, per its own releases.
• The public currency funded deals. In its November 2020 bought deal release, the company stated the proceeds were for acquisitions, working capital and general purposes.
• Late growth stopped. 2024 revenue fell 4.2% and adjusted EBITDA fell 1.7% from 2023, and the Germany segment took the impairment.
• The exit. On February 7, 2025, an H.I.G. affiliate agreed to pay C$5.50 a share in cash, about 56% above the TSX close of February 6, at an enterprise value of about C$1.3 billion, or 7.4 times trailing adjusted EBITDA to September 30, 2024. The board acted on a special committee's recommendation, with fairness opinions from two advisers. Holders of about 24% of the shares signed voting support agreements, and a C$34.4 million termination fee applied in some cases.
• The price rise. On March 31, 2025 a third party made an unsolicited, binding all-cash proposal at C$6.00. On April 1, 2025 Converge and H.I.G. amended their agreement to C$6.00 a share. The company said the third party raised its proposal to C$6.10 shortly before the board approved the amendment, which the board said offered a high degree of certainty. Converge ended talks with the third party.
• Completion. H.I.G. announced on April 22, 2025 that the acquisition was complete, merged with its portfolio company Mainline Information Systems to form Pellera Technologies, with pro forma 2024 revenue of about $4 billion.

What does and does not transfer to a small holding company?

My view is that these transfer:

• A small first listing can be a starting point rather than the end state. The route moved from a shell to TSXV to TSX over about 27 months.
• Public equity can be raised in repeated, sized tranches when the share price supports it.
• A take-private is a possible end. It required a special committee, minority approval and a court-approved arrangement.

These do not:

• The capital pool structure is a Canadian TSXV tool. See listing a holding company on the TSXV and reverse takeovers for roll-ups.
• Scale. Converge had C$948.8 million of revenue before the TSX graduation, far above most small holding companies.
• A bought-deal market with institutional underwriters led by firms such as Canaccord Genuity.

What do the numbers show when you work them through?

• Raise sizes: 13,400,000 shares times C$3.00 is C$40.2 million, matching the release.
• Price path: C$3.00 in November 2020 to C$4.85 in January 2021 is up 61.7%. The final C$6.00 is 23.7% above C$4.85 and double C$3.00, before any dividends. The original C$5.50 was 13.4% above C$4.85.
• Implied prior close (my calculation): C$5.50 divided by 1.56 is about C$3.53. That is about 27% below the January 2021 raise price, and the final C$6.00 is about 70% above that close.
• Latest growth: 2024 revenue C$2,592.1 million against C$2,705.2 million is down 4.2%.

Where these numbers come from: Reverse takeover terms are from the TSX Venture Exchange bulletin (via Newswire), the August 2018 acquisition agreement release and the November 2018 filing statement release. Results and financings are from company releases: November 2020 bought deal, fiscal 2020 results, fiscal 2021 results and fiscal 2024 results, which also give the 2023 comparatives. The take-private terms are from the February 7, 2025 announcement the April 1, 2025 amendment release, the April 10, 2025 shareholder approval release, the April 16, 2025 final order release and the April 22, 2025 completion release. Percentages are my arithmetic on those figures.

Related questions

Is a capital pool company deal the same as a reverse merger?

It is related. The exchange bulletin calls this deal a reverse takeover, but it was a TSXV qualifying transaction with a listed shell. US reverse mergers use different rules.

How was the take-private price set?

The February release gave C$5.50 and a 56% premium, with a special committee and two fairness opinions. The price rose to C$6.00 after a third party's competing proposal. The releases do not explain the price beyond that.

Did shareholders have to approve it?

Yes. The announcement required two-thirds of votes cast, a simple majority excluding rollover holders, and court approval. Shareholders approved it on April 10, 2025 with 98.85% of votes cast, and the Ontario Superior Court of Justice granted a final order by April 16, 2025.

What comes next

For how a listed shell reverse takeover works for a roll-up, read roll-up reverse takeovers explained.

Related articles

• How does a roll-up go public through a reverse takeover or shell?
• Can a holding company list on the TSX Venture Exchange, and why do Canadian roll-ups start there?
• What are the ways a holding company can go public?
• What does it cost to take a holding company public and keep it public?
• Which small holding companies have gone public, and what happened?

Meraki Dealmakers is a service of Meraki Partners, LLC, an advisory firm. It is not a broker-dealer, investment adviser, business broker, law firm or accounting firm. This article is general information, not legal, tax or investment advice.