martinwolf
Transaction Analysis
CVC to Acquire ConvergeOne
Financial Information*
- Enterprise Value $1.8B
- EV/LTM Revenue 1.6x
- EV/LTM EBITDA 20.3x
Transaction Facts
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ConvergeOne (Nasdaq:CVON), a leading global IT and managed services provider, announced today that it had entered into an agreement to be acquired by leading private equity firm CVC Capital Partners
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The transaction is valued at $12.50 per share, a 35% premium over its 30-day volume-weighted average price and a 56% premium over ConvergeOne's debut closing price.
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The transaction is expected to close in either the fourth quarter of 2018 or the first quarter of 2019, with ConvergeOne continuing to operate out of its corporate headquarters in Eagan, MN and be led by its current executive team.
- Now You See Me, Now You Don't: ConvergeOne went public earlier this year, choosing a combination with an SPAC as the fastest and cheapest path to do so. This was a rare development--IPOs are increasingly uncommon, especially in the tech space (according to EY, IPO activity for the first nine months of 2018 fell to 1,000--an 18% decrease from the previous year). It's much more common to see private equity firms selling to each other as assets grow into and out of their target valuation ranges.
- Moving On Up: At the time ConvergeOne announced its intention to go public, it reported estimated 2018 revenues of $1.2B and adjusted EBITDA of $144M . During its most recent earnings call, the company upped its guidance for the year--estimating annual revenue of between $1.55B and $1.65B.
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Happy Ending
: This deal sees ConvergeOne's current private equity sponsor and majority shareholder, Santa Monica-based Clearlake Capital, tendering its shares and realizing an exit. In a statement, firm managing partner and co-founder Behdad Eghbali reported the achievement of approximately 400% EBITDA growth since ownership began in 2014.
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1+1+1+1... = $1.8B: This deal is the culmination of a "buy-and-build" strategy stretching far back into ConvergeOne's history and executed masterfully under the guidance of president and chairman John McKenna. John is no stranger to success--he was a senior executive at Businessland, JWP and led Siemens' $500M+ US services business. What he's done here--successfully buying and integrating multiple acquisitions and securing significant value-add on exit--is the paragon of an accomplished resume.
For more information about this transaction,
click here to read the press release.
*Enterprise Value from press release. Financial information from Factset.
martinwolf
was not the advisor in this transaction.
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Headquartered in Scottsdale, Arizona with an office in New York, martinwolf is a leading M&A Advisory focused on middle market companies in the IT Services, IT Supply Chain, IT-Enabled Business Process Outsourcing and Software as a Service (SaaS) space. Since 1997, our team has completed more than 160 transactions in over 20 countries and sold eight divisions of Fortune 500 companies. martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com. To learn more about martinwolf, contact Matthew Putzulu at [email protected] © martinwolf 2018 |
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