Converge Technology Solutions Acquires Lighthouse Computer Services, Inc.

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

Converge Technology Solutions has added Lighthouse, a leading technology solutions provider in the Northeast US focused on analytics, hybrid cloud, infrastructure, and security solutions to its growing portfolio of companies.

TORONTO, Dec. 4, 2018 /CNW/ - Converge Technology Solutions, Corp. ("Converge" or "the Company") announced today that it has acquired Lighthouse Computer Services, Inc. ("Lighthouse"), a Northeast based partner focused on analytics, hybrid cloud, infrastructure, and security. Lighthouse brings highly skilled teams of experienced technology experts, business consultants, and industry thought leaders to Converge's fast growing platform.

Lighthouse generated revenues of approximately US$82 million and Adjusted EBITDA of approximately US$4.7 million for the trailing 12 months ended October 31, 2018.  The acquisition was completed pursuant to an equity purchase agreement among Converge Acquisition, LLC, a wholly owned subsidiary of Converge, as purchaser, Spyglass Solutions, Inc. and certain individual sellers (the "Lighthouse Agreement").  Under the Lighthouse Agreement, purchase consideration consisted of (i) US$12.4 million in cash on the closing date; (ii) a promissory note in the amount of US$2.6 million in favor of the sellers to reflect excess working capital contained in the business at closing; and (iii) up to an aggregate of US$8.2 million in earn-out payments for the three years following closing of the acquisition (up to a maximum of US$2.7 million in each of the first two years and US$2.8 million in the third year following the acquisition) based on the achievement of certain milestones.  The cash portion of the purchase price was financed by Converge's credit facilities. 

Lighthouse President Greg Berard will continue in his role along with the existing Lighthouse management team.  Working with Greg,  Converge  will look to introduce its hybrid IT solutions including identity-based enterprise Blockchain, cognitive, cybersecurity, resiliency managed services and multi-cloud solutions to customers across North America.

"Our team at Lighthouse helps organizations solve IT challenges by applying innovative cloud, cognitive, and cybersecurity technologies. As trusted advisors, we enable our clients to exceed their goals and objectives to ensure long-term success," said Greg Berard. "We look forward to working with our peers at Converge to impact more organizations while bringing enhanced cloud platform capabilities to our existing clients."

Lighthouse stays on the forefront of innovation, guiding customers through digital transformations with a focus on building secure cognitive applications in hybrid cloud environments. Whether working an on-premise or in a public, private, or hybrid cloud environment, Lighthouse brings the skills and expertise to properly architect secure, effective solutions.

"We are ecstatic that Lighthouse is joining the Converge family of companies," said Shaun Maine, CEO of Converge. "As a top partner in the IBM ecosystem and one of the 12 companies in Red Hat's top Application Partner Program, Lighthouse adds another dimension to our Hybrid IT solutions.  This is especially relevant in light of IBM's announcement of its intention to purchase RedHat.  As we move forward, Lighthouse will play a significant role in Converge's strategy of becoming a major Hybrid IT solutions provider in the New York marketplace."

Lighthouse marks the sixth acquisition completed by Converge since October 2017. Converge's family of companies also includes Corus Group, LLC; Northern Micro, Inc.; Becker-Carroll; Key Information Systems, Inc.; BlueChipTek, Inc.; and Essex Technology Group, Inc.

About Converge
Converge Technology Solutions Corp. combines innovation accelerators and foundational infrastructure solutions to deliver best-of-breed solutions and services to customers. The Company is building a platform of regionally-focused Hybrid IT solutions providers to enhance their ability to provide multi-cloud solutions, blockchain, resiliency, and managed services, enabling Converge to address the business and IT issues that public and private-sector organizations face today. For more information, visit http://www.convergetp.com.

About Lighthouse
Lighthouse is an award winning, IT firm with deep experience and a proven track record of delivering comprehensive solutions in the areas of analytics, hybrid cloud, infrastructure, and security.  Since 1995, they have been helping their clients solve their IT challenges, providing on-site support, fostering long-term relationships, and gaining deep knowledge of their client's environments to help them ensure long-term success. For more information, visit   http://www.lighthousecs.com.

Notice to Reader:  Use of Non-IFRS Financial Measures and Forward-Looking Statements

1. Non-IFRS Financial Measures
   In this news release, certain non-IFRS measures to evaluate performance are used.  The term "Adjusted EBITDA" does not have any standardized meaning prescribed within IFRS and therefore may not be comparable to similar measures presented by other companies.  Such measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS such as net income.  Adjusted EBITDA is defined as gross profit less selling, general and administrative expenses, and corresponds to income before income tax, depreciation and amortization, finance expenses, change in fair value of contingent consideration, transaction costs for acquisitions, initial public offering costs and other non-operating expenses.
   
   Management believes Adjusted EBITDA is an important indicator as it excludes certain items that are non-cash expenses, items that cannot be influenced by management in the short term and items that do not impact core operating performance, demonstrating the Company's ability to generate liquidity through operating cash flow to fund working capital needs, service outstanding debt and fund future capital expenditures.  Adjusted EBITDA is used by some investors and analysts for the purposes of valuing an issuer.  The intent of Adjusted EBITDA is to provide additional useful information to investors and analysts and is also used by management as an internal performance measurement.
   
   
2. Forward-Looking Information
   This news release contains certain "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of applicable Canadian securities legislation regarding Converge and its business. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected" "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts". "estimates", "believes" or intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could, "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Except as required by law, Converge assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change.  The reader is cautioned not to place undue reliance on forward-looking statements.

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Converge Technology Solutions Corp.

Mary Anne Palangio, Chief Financial Officer, Converge Technology Solutions Corp.m [email protected], [phone]