Softchoice Corporation Announces Filing of Circular and Receipt of Interim Order in Relation to Proposed Plan of Arrangement with World Wide Technology

Public Relations
Cheryl Salman
Director, Communications and Brand
cheryl.salman@softchoice.com

Investor Relations
Tim Foran
Investor Relations
investors@softchoice.com

Softchoice Corporation (“Softchoice” or the “Company”) (TSX:SFTC) today announced that it has filed and is in the process of mailing its management information circular and related materials to shareholders (the “Shareholders”) in connection with its previously announced plan of arrangement (the “Arrangement”) involving the Company, World Wide Technology Holding Co., LLC (“WWT”) and 2672989 Alberta ULC (the “Purchaser”), an affiliate of WWT, pursuant to which, among other things, all of the issued and outstanding common shares (the “Shares”) in the capital of the Company will be acquired by the Purchaser for cash consideration of $24.50 per Share (the “Consideration”). The circular and related materials can also be accessed at the Company’s website at https://investors.softchoice.com/Special-Meeting-2025.

The special meeting of Softchoice’s shareholders (the “Meeting”) is to be held as a virtual-only meeting via live audio webcast on March 4, 2025 at 9:00 a.m. (Toronto time). The Meeting can also be accessed via live webcast at https://virtual-meetings.tsxtrust.com/1748 (case sensitive password: softchoice2025). Only holders of Shares of record as of the close of business on January 27, 2025 are entitled to receive notice of, attend, participate and vote at, the Meeting. At the Meeting, Shareholders will be asked to pass a special resolution (the “Arrangement Resolution”) approving the Arrangement.

The Company also announced today that the Ontario Superior Court of Justice (Commercial List) has issued an interim order in connection with the Arrangement, authorizing the calling and holding of the Meeting and other matters related to the conduct of the Meeting.

The board of directors of the Company (the “Board”) has unanimously determined that the Arrangement is in the best interests of the Company and is fair to the Shareholders and, accordingly, the Board unanimously recommends that the Shareholders vote FOR the Arrangement Resolution.

Reasons for and Benefits of the Arrangement

• All-cash Consideration providing certainty of value and liquidity. The all-cash Consideration to be received by the Shareholders pursuant to the Arrangement, which is not subject to any financing condition, allows the Shareholders to crystalize a favourable transaction multiple for all their Shares, providing certainty of value and liquidity for their investment, while removing the volatility associated with owning securities of the Company as an independent, publicly-traded company as well as the risks and uncertainties and longer potential timeline for realizing value from the Company’s strategic plan or other possible strategic alternatives.

• Favourable multiple comparisons. The implied valuation multiple on the Arrangement of 13.2x on an enterprise value to adjusted earnings before interest, taxes, depreciation and amortization basis (based on the Company’s reported financial results for the trailing twelve months to September 30, 2024), compares favourably to transactions in the software and technology sector, as well as the current trading value of the Company’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.

• Attractive premium to Shareholders. The Consideration to be received by Shareholders represents a premium of approximately: (i) 14% to the closing share price on December 30, 2024, the last trading day prior to the announcement of the Arrangement; and (ii) 19% to the 90-day volume weighted average share price as of December 30, 2024. In assessing these premiums, the special committee of independent directors of the Company (the “Special Committee”) and the Board also considered the fact that the Shares had appreciated in price significantly over the short to medium-term, increasing by approximately 39.5% during the 52-week period prior to December 30, 2024, and that recent trading prices reflected limited liquidity, representing values for a limited number of the Shares rather than broader market demand. The Board and the Special Committee also considered the prevailing risk that while the Company's share price had recently traded at a higher multiple relative to certain comparable peers, the Company's share price could revert to historical trading multiples relative to such peers. The Consideration is also above the 52-week high closing price of the Shares on the Toronto Stock Exchange as of December 30, 2024, and represents a total shareholder return of approximately 62% to the Company's initial public offering price of $20.00, as adjusted for the Company's historical dividend payments since its initial public offering and assuming reinvestment of such dividends into the Company.

• Support of Softchoice Directors, Senior Officers and Major Shareholder. Birch Hill Equity Partners Management Inc., together with certain funds managed by it, collectively, the Company’s largest Shareholder, as well as all directors and certain senior officers of the Company, have entered into the support and voting agreements pursuant to which such Shareholders have agreed to vote all Shares held by them in favour of the Arrangement. Collectively, such Shareholders represented approximately 51.3% of the outstanding Shares as of the close of business on January 27, 2025.

• Credibility of WWT to complete the Arrangement. The Purchaser’s obligations under the arrangement agreement entered into between the Company, the Purchaser and WWT are unconditionally guaranteed by WWT, a credible and reputable global technology solutions provider with US$20 billion in annual revenues.

• Value supported by Fairness Opinions. The Board received fairness opinions from each of TD Securities Inc. (“TD Securities”) and RBC Dominion Securities Inc. (“RBC”) and the Special Committee received a fairness opinion from its independent financial advisor, Origin Merchant Partners, each of which 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 the Shareholders pursuant to the Arrangement is fair, from a financial point of view, to such Shareholders.

• Thorough review process and market check. Following the receipt of unsolicited inquiries from third parties, the Company was marketed to logical potential strategic and financial counterparties in connection with a review process conducted by the Board and the Special Committee, with the assistance of TD Securities and RBC. Over the course of the process, TD Securities, RBC and/or representatives of the Company had discussions with thirteen (13) potential strategic and financial purchasers that were considered to be the most likely potential purchasers of the Company. Eleven (11) of such potential purchasers, which includes WWT, entered into confidentiality agreements and all potential acquirors, including WWT, were managed on the same timeline. In addition to those third parties invited to participate in the process, four (4) financial sponsors contacted representatives of the Company expressing interest in the Company during the process but ultimately had no timely or material engagement. The process did not surface any proposal superior to the Arrangement.

YOUR VOTE IS IMPORTANT. CAST YOUR VOTE WELL IN ADVANCE OF THE PROXY VOTING DEADLINE.

Shareholders are encouraged to read the circular in its entirety and vote their Shares as soon as possible, in accordance with the instructions accompanying the form of proxy or voting instruction form mailed to Shareholders together with the circular. The circular includes full details on the Arrangement and related matters, including the background to the Arrangement, voting procedures, benefits of the Arrangements, risk factors, the recommendations of the Board and the Special Committee, and the various factors considered by the Board and the Special Committee in making their respective recommendations.

The deadline for voting Shares by proxy is at 9:00 AM (Toronto time)? on February 28, 2025.

Questions & Voting Assistance

Shareholders who have questions about the meeting or require assistance with voting may contact the Company’s proxy solicitation agent:

Laurel Hill Advisory Group

About Softchoice Corporation

Softchoice Corporation (TSX:SFTC) 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. We do this by delivering secure, AI-powered cloud and digital workplace solutions supported by our advanced software asset management methodology and capabilities. Through our customer success framework, we create value for our customers by reducing their IT spending, optimizing their technology, and supporting business-driven innovation. We are a highly engaged, high-performing team that is welcoming, inclusive, and diverse in thought and experience, and are certified as a Great Place to Work® in Canada and the United States. For more information, visit:

Website: www.softchoice.com

Forward-Looking Information

This press release contains “forward-looking information” and “forward-looking statements” (collectively, “Forward-looking information”) within the meaning of applicable securities laws. This forward-looking information is identified by the use of terms and phrases such as “may”, “would”, “should”, “could”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe”, or “continue”, the negative of these terms and similar terminology, including references to assumptions, although not all forward-looking information contains these terms and phrases. These statements include, without limitation, statements regarding the timing of the Meeting and the mailing date of the Meeting materials.

In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events or circumstances.

Forward-looking information is based on management’s beliefs and assumptions and on information currently available to management, and although the forward-looking information contained herein is based upon what we believe are reasonable assumptions, investors are cautioned against placing undue reliance on this information since actual results may vary from the forward-looking information.

Forward-looking information involves known and unknown risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, the risk factors described in greater detail under “Risk Factors” of the Company’s management information circular relating to the Meeting filed on SEDAR+. These risks and uncertainties further include (but are not limited to) as concerns the Arrangement, the failure of the parties to obtain the necessary shareholder, regulatory and court approvals or to otherwise satisfy the conditions to the completion of the Arrangement, failure of the parties to obtain such approvals or satisfy such conditions in a timely manner, significant Arrangement costs or unknown liabilities, failure to realize the expected benefits of the Arrangement, and general economic conditions. Failure to obtain the necessary shareholder, regulatory and court approvals, or the failure of the parties to otherwise satisfy the conditions to the completion of the Arrangement or to complete the Arrangement, may result in the Arrangement not being completed on the proposed terms, or at all. In addition, if the Arrangement is not completed, and the Company continues as a publicly-traded entity, there are risks that the announcement of the proposed Arrangement and the dedication of substantial resources of the Company to the completion of the Arrangement could have an impact on its business and strategic relationships (including with future and prospective employees, customers, suppliers and partners), operating results and activities in general, and could have a material adverse effect on its current and future operations, financial condition and prospects.

Consequently, all of the forward-looking information contained herein is qualified by the foregoing cautionary statements, and there can be no guarantee that the results or developments that we anticipate will be realized or, even if substantially realized, that they will have the expected consequences or effects on our business, financial condition or results of operation. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained herein represents our expectations as of the date hereof or as of the date it is otherwise stated to be made, as applicable, and is subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or amend such forward-looking information whether as a result of new information, future events or otherwise, except as may be required by applicable law.

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