M&A activity continues, with the big swallowing up the big in the ongoing consolidation of channel partners. We just had an interview with WWT, which can be found at eChannelNEWS: https://www.e-channelnews.com/gigamon-wwt-cybersecurity-strategies-and-partnerships/
Andrew Caprara, Softchoice President and Chief Executive Officer commented on the announcement: “We are excited to join WWT. Its scale and global reach, customer base of large organizations, and industry leading infrastructure solutions are a perfect complement to our software and cloud focused solutions, our Canadian presence, and our strength in the North American mid-market. We also share similar Great Place to Work certified organizational cultures, demonstrating an aligned passion for our people. I believe WWT is the ideal partner for our customers and employees and I’m excited about our future as a combined firm.”
Jim Kavanaugh, WWT Co-Founder and Chief Executive Officer noted: “As the AI revolution reshapes industries and transforms businesses worldwide, we are at the forefront of this change – leading by empowering enterprises of all sizes to achieve better business outcomes. Softchoice has been a transformative player in the IT industry for over 35 years, and adding its complementary software, cloud, cybersecurity and AI capabilities to WWT’s portfolio will enable us to create even greater value for our clients striving to achieve their digital transformation goals.”
WWT and Softchoice are already outstanding companies, so why merge?
Aren’t both organizations large and smart enough to succeed independently? Will this impact a competitive market? What will be the net result, aside from increased shareholder valuation? How will this affect the larger channel community and supply chain? Without a question, there will be winners and losers, but we rarely witness this as it evolves over time.
Beyond the obvious synergies and growth potential of these acquisitions, there are lots of dynamics at play. Who will be the management team following the merger? Has the campaign for positions already begun? How will vendor relationships evolve as the two entities streamline their product selection? How will this affect the competitive landscape? How would this transaction motivate others to acquire? How will this affect the end user? What will happen once the two sets of employees merge, and who will be filtered out?
One regular piece of feedback we receive from employees on both sides of a merger is the interruption of their career path. It’s as if someone pressed the reset button and no one knows who would be left standing. Internal politics can have a negative impact on the organization in ways that are invisible to outsiders.
I always look at M&A one year later to see what the impact is. Not all mergers and acquisitions benefit the channel or end customers. We witnessed this with the Broadcom merger and VMware. Sometimes it’s just a money-making scheme, and I know the capitalists out there are screaming, “It’s always about the money stupid!” I get it, but I’m curious why successful organizations must go down this path. It’s as if once the bean counters take charge, the endgame is set.
Maybe I am taking this one more personally because it’s a Canadian company being acquired. Where the Canadian dollar is now makes it very appealing for American companies to go on a buying spree. Plus, with all the trade and tariff negotiations going on, Canada appears to be under financial attack.
David Steward, WWT Founder and Chairman added: “This acquisition strengthens our access to Commercial, Small and Medium business customers while expanding WWT’s position in the U.S., Canada, and around the world. Given our shared mission and Great Place to Work designations, we will continue our commitment to building a culture of innovation and inclusion to be a great place to work for all.”
Transaction will be subject to, among other things, the approval at the special meeting of shareholders. The company intends to hold the meeting in March 2025, where the transaction will be considered and voted upon by shareholders. The Transaction is also subject to court approval and customary closing conditions, including receipt of key regulatory approvals, is not subject to any financing condition and, assuming the timely receipt of all required key regulatory approvals, is expected to close in late Q1 or early Q2 2025.
