TIDMCCC
RNS Number : 4017Y
Computacenter PLC
09 September 2020
Computacenter plc
Incorporated in England
Registration number: 03110569
LEI: 549300XSXUZ1I19DB105
ISIN: GB00BV9FP302
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSE OF
ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) No. 596/2014.
FOR IMMEDIATE RELEASE
Computacenter plc
COMPUTACENTER PLC ANNOUNCES ARRANGEMENT AGREEMENT TO ACQUIRE
PIVOT TECHNOLOGY SOLUTIONS, INC.
Computacenter plc ("Computacenter" or the "Group") announces
that on 8 September 2020 it entered into an Arrangement Agreement
pursuant to which Computacenter has agreed to directly or
indirectly acquire the entire issued share capital of Pivot
Technology Solutions, Inc. ("Pivot"), a company listed on the
Toronto Stock Exchange (TSX:PTG), by way of a Canadian Plan of
Arrangement with an all cash offer of CAD 2.60 per share. The offer
has the unanimous recommendation of Pivot's board. The directors
and officers of Pivot have provided support undertakings in respect
of the shares held or controlled by them, for a potential total of
4.86 million shares, including options and Restricted Stock Units,
representing circa 12 per cent of the fully diluted share
capital.
Pivot is an IT solutions provider with approximately 85 per cent
of its revenues from customers in the US and the remainder from
customers in Canada. Pivot employs approximately 600 people in the
US and 100 in Canada. In the US, Pivot's customers are large
enterprise organisations across the country, with particular
strength on the West Coast (CA, WA), Central (TX) and South East
(GA, FL) regions. In Canada, Pivot's wholly-owned subsidiary,
TeraMach Technologies Inc., is a leading IT supplier to the
Canadian public sector. Computacenter intends to integrate its
existing US operations with Pivot, approximately doubling both its
revenue and headcount in the US and significantly increasing its
coverage and capability, especially in Services with Pivot's
approximately USD 80 million of Pivot-Provided Services. The Pivot
and Computacenter US businesses are complementary and the
combination of the two will allow customers in the US to receive
closer to the full range of capabilities that Computacenter offers
customers in its more mature European businesses. Senior leadership
in Pivot is expected to remain and play a key role in the combined
Computacenter business. This includes Kevin Shank, Pivot President
& CEO, who has worked in partnership with Computacenter in a
previous role, and David Toews, Pivot Chief Financial Officer.
The cash consideration of CAD 2.60 per share (the
"Consideration") represents CAD 105.8 million on a fully diluted
basis of 40,688,650 shares, options, and Restricted Stock Units,
payable upon completion of the acquisition. The arrangement is
subject to the approval by 66 (2) /(3) per cent of the votes cast
by Pivot's shareholders at a special meeting of Pivot's
shareholders held to approve the arrangement, currently anticipated
to take place on 23 October 2020, the approval by the Canadian
court of the Plan of Arrangement, and certain other conditions
precedent to closing. The Consideration will be funded from
Computacenter's existing cash resources (Computacenter held cash
and cash equivalents of GBP222.1 million at 30 June 2020). Pivot
has a credit facility from a lending group represented by JPMorgan
Chase Bank, N.A. ("JPMC"), which provides Pivot with a USD 225.0
million senior secured asset based revolving credit facility ("JPMC
Credit Facility"). The JPMC Credit Facility may be used for
revolving loans, letters of credit, protective advances, over
advances, and swing line loans. Amounts owing by Pivot under the
JPMC Credit Facility were USD 103.7 million and USD 106.7 million
as at June 30, 2020 and December 31, 2019, respectively; and
average undrawn availability was USD 47.8 million and USD 65.3
million for the periods ended June 30, 2020 and December 31, 2019,
respectively. Computacenter has agreed with JPMC to retain the JPMC
Credit Facility following completion of the acquisition.
For the year ended 31 December 2019, Pivot reported a statutory
profit before tax of USD 20.7 million on reported revenue of USD
1,218.1 million. The profit before tax figure for the year ended 31
December 2019 includes USD 6.0 million of finance expense, USD 8.0
million of amortisation of acquired intangibles, restructuring and
other non-recurring charges of USD 4.6 million and a gain on
disposal of USD 22.3 million. Pivot reported profit before
depreciation and amortisation, finance expense, restructuring and
other non-recurring costs, change in fair value of liabilities,
gains on disposal and other income of USD 26.8 million for the year
ended 31 December 2019. As at 30 June 2020, Pivot reported Gross
Assets of CAD 541.0 million. Computacenter expects that this
acquisition will be accretive to the Group's primary measure,
adjusted diluted earnings per share, in 2021.
"We are pleased with our progress in the US, including the
acquisition of Fusionstorm in 2018. The acquisition of Pivot
represents an opportunity to increase our scale, geographic
footprint and capabilities in US. Additionally, Canada expands our
total market opportunity and helps us meet the needs of
international customers. The businesses are a good fit and the
combination gives us the opportunity to enable the long-term
success of customers, partners and people from both teams." said
Mike Norris, Computacenter Group CEO.
"Computacenter's strong US and global organization, along with
its robust and industry leading services portfolio, make it a great
fit for Pivot's US and Canadian businesses," said Kevin Shank,
Pivot President & CEO. "The merging of the US businesses allows
us to scale the organization and better support our existing and
new clients. We believe that Computacenter offers a secure
long-term future for our businesses and an exciting opportunity for
our people." Mr. Shank added.
About Computacenter
Computacenter is a leading independent technology partner,
trusted by large corporate and public sector organisations. We help
our customers to source, transform and manage their IT
infrastructure to deliver digital transformation, enabling users
and their business. Computacenter is a public company quoted on the
London FTSE 250 (CCC.L) and employs over 16,000 people worldwide.
Computacenter was supported by Obair Partners on this transaction.
For more information, visit www.computacenter.com
About Pivot
Pivot is an industry-leading information technology services and
solutions provider to many of the world's most successful
companies, including members of the Fortune 1000, as well as
governments and educational institutions. By leveraging its
extensive original equipment manufacturer (OEM) partnerships and
its own fulfilment, professional, deployment, workforce and managed
services, Pivot supports the IT infrastructure needs of its
clients. For more information, visit www.pivotts.com .
Enquiries:
Computacenter plc
Mike Norris, Chief
Executive 01707 631601
Tony Conophy, Finance
Director 01707 631515
Tulchan Communications
James Macey White / 020 7353
Matt Low 4200
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