“Converge Technology Solutions Corp. Acquires Creative Breakthroughs, Inc. “

Converge Technology Solutions Corp. Acquires Creative Breakthroughs_ Inc.-01

Converge Technology Solutions Corp. (“Converge” or “the Company”) (TSX:CTS) (FSE:0ZB) (OTCQX:CTSDF) a software-enabled IT & Cloud Solutions provider, is pleased to announce it has acquired cybersecurity solutions provider Creative Breakthroughs, Inc. (“CBI”).

Headquartered in Ferndale, Michigan with a presence in regions across the United States, CBI is a services-led team focused on cybersecurity solutions that make the world a safer place. Comprised of strategists, former CISOs, and security experts, CBI identifies and stops would-be breaches before they impact an organization. CBI’s main focus areas of threat-detection and obstruction lie in helping defend and secure networks and endpoints, testing and monitoring areas of operational risk, and protecting data. The company’s offerings range from security programs to architecture and integration to managed security.

“For over three decades, our clients have been our biggest fans. They’ve been attracted to our tightly focused offerings with world-class results, and, in an effort to continue meeting their demands in relation to our ability to provide scale, we explored the M&A market for a partner to help us tell a bigger story. By joining Converge, CBI will now be able to take what we do to a much larger audience, integrate with key new partnerships, and have in-depth conversations regarding Cloud, Analytics, and Digital Infrastructure at the level our clients have come to expect,” said Steve Barone, CEO of CBI.

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“Converge is excited to have CBI join us as our 30th acquisition,” stated Greg Berard, President of Converge. “CBI’s knowledge of the security landscape and the strength of their team and solutions will be a major asset for Converge’s cybersecurity practice and our ability to continue protecting our clients with the best threat defenses for their organizations. CBI expands our security portfolio immediately by bringing more strategic partnerships and a team of strong technical resources across North America that will provide cybersecurity expertise and value for all of our Converge clients.”

CBI generated gross revenue of approximately C$112 million with an adjusted EBITDA of C$9.1 million for the trailing twelve-month period ended January 31, 2022. Consideration for the purchase consisted of US$47.0 million plus working capital in excess of $3M paid in cash at closing and earn-out payments of up to US$17 million in aggregate, payable over three years. Assuming CBI achieves the minimum level of EBITDA to earn the full earn out, the purchase multiple for the transaction would be approximately 5.1 times EBITDA in the third year following closing. Assuming no earn out payments are made, the purchase multiple would be approximately 6.0 times adjusted EBITDA for the trailing twelve-month period ended January 31, 2022, after adjusting for positive working capital. The acquisition is expected to be immediately accretive to Converge, resulting in increased revenue and adjusted EBITDA.

CBI marks the thirtieth acquisition announced by Converge or its affiliates since October 2017. Converge’s family of companies also includes Corus Group, LLC; Northern Micro, Inc.; 10084182 Canada Inc. operating as Becker-Carroll; Key Information Systems, Inc.; BlueChip Tek, Inc.; Lighthouse Computer Systems, Inc.; Software Information Systems LLC.; Nordisk Systems, Inc.; Essex Technology Group, Inc.; Datatrend Technologies, Inc.; VSS, LLC; Solutions PCD, Inc.; Unique Digital, Inc.; Workgroup Connections, Inc.; Vivvo Application Studios LTD.; Vicom Computer Services, Inc.; CarpeDatum LLC; Accudata Systems, Inc.; Dasher Technologies, Inc.; ExactlyIT, Inc.; REDNET AG; Vicom Infinity, Inc.; Infinity Systems Software, Inc.; LPA Software Solutions, LLC; OPIN Digital, Inc; Paragon Development Systems, Inc.; Visucom GmbH; 1CRM Systems Corp.; and Interdynamix Systems.

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