Canadian IT and cloud solutions provider Converge Technology Solutions has announced the acquisition of three education market-focused German companies for approximately US$25.9 million.
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Converge, founded in 2017, is based in Gatineau, Quebec and Toronto, Ontario. The company has 820 employees listed on LinkedIn. Converge’s areas of expertise include analytics, cloud and cybersecurity.
DEQSTER, founded in 2021, is based in Hamburg, Germany. The company has six employees listed on LinkedIn. DEQSTER’s areas of expertise include iPad accessories and digital education.
Institut für moderne Bildung (“IfmB”), founded in 2020, is based in Starnberg, Germany. The company has seven employees listed on LinkedIn. IfmB’s areas of expertise include education administration programs.
Gesellschaft für digitale Bildung (“GfdB”), founded in 2016, is based in Hamburg, Germany. The company has 41 employees listed on LinkedIn. GfdB’s areas of expertise include digitization, education, teacher training, mobile devices, tablets, iPads, advice, schools, electronic council work, W-Lan, IT infrastructure, financing, parental financing, insurance and service.
Pushing Into the German Education Market
GfdB and IfmB are full-service IT suppliers for education, offering hardware, software, advanced training, and comprehensive technical/consulting services. DEQSTER specializes in the development and production of equipment for digital learning and working.
The acquisitions are part of Converge’s strategy to position itself as a leading education partner in the German market. Converge has already made moves in this direction, having acquired REDNET and Visucom in the past.
Converge’s Education Acquisitions
Mathias Harms, CEO, GfdB, commented:
“As one of the leading providers of complete IT solutions for the education market for many years, GfdB has ensured digitalization in schools and education institutions is happening in a sustainable way. Our new strategic partnership with Converge will allow us to significantly enlarge our range of products and services, as well as offer an even better 360° approach to our clients. Additionally, with the new alliance between Gesellschaft für digitale Bildung, Institut für moderne Bildung, DEQSTER, REDNET, A Converge Company, and Visucom, A Converge Company, we are excited to strengthen our competency in the areas of IT equipment and services for companies in the education sector.”
Cuma Saado, CEO, DEQSTER, said:
“I am thrilled that our new partnership with Converge will allow us to enlarge our portfolio and to offer holistic solutions. By bundling DEQSTER’s competencies with Converge’s portfolio of companies and strengthening cooperation, our sales partners will benefit since we can offer them a significantly more comprehensive service. As a manufacturer of equipment for digital learning and working, we will also address client wishes in a more targeted manner and will be able to develop 360° solutions together, which are tailored perfectly to education institutions.”
Barbara Weitzel, CEO of REDNET, a Converge Company, added:
“Together with GfdB and IfmB, REDNET, A Converge Company, will be able to offer German educational institutions an even more thorough and holistic service portfolio aimed at making digital schools a success. With DEQSTER, we also have another accessory specialist for the education market, which further expands our joint portfolio following the acquisition of Visucom, A Converge Company.”
Shaun Maine, CEO, Converge, added:
“The additions of GfdB, IfmB, and DEQSTER to Converge’s portfolio of companies in Germany will be a major leap forward in our ability to strongly serve the German market. Building on the successes of REDNET, A Converge Company, and Visucom, A Converge Company, GfdB, DEQSTER, and IfmB will also allow us to become the leading education partner in Germany and will help us continue growing solution offerings and services for our clients in Europe.”
Breaking Down the Deal
GfdB, IfmB and DEQSTER generated revenue of approximately $106 million for the trailing twelve-month period ended March 31, 2022.
The purchase price consists of €25 million (US$25.9 million) in cash paid at closing based on a pro-rated EBITDA of €6.7 million for the fiscal year 2022.
In addition, three earnout payments of up to €5 million (US$5.2 million) each will be paid, with the final earnout payment contingent on the companies achieving an adjusted EBITDA of €10.8 million (US$11.2 million) in 2024.
About Converge Technology Solutions
Converge Technology Solutions is a software-oriented IT and cloud solutions provider. Areas of expertise include advanced analytics, cloud and cybersecurity offerings. Key capabilities span managed services and digital infrastructure.
Converge has extensive M&A experience. These deals represent the company’s 32nd acquisition since October 2017. Most recently, Converge acquired PC Specialists — which does business as Technology Integration Group (TIG).
Converge also acquired 1CRM, a Saas-based provider of task management, marketing automation, sales and opportunities, order management, client service and project management solutions in Victoria, British Columbia, Canada. Before that, it bought up Interdynamix (IDX), a Canadian business solutions and engineering systems integrator.