Business News

Softchoice Corporation Acquires Optimus Solutions

Thursday 03. January 2008 - Softchoice Corporation (TSX: SO), announced today that it is continuing the implementation of its U.S. growth strategy with the acquisition of Optimus Solutions.

Optimus Solutions is a comprehensive IT products and solutions company focused on helping enterprise and mid-market clients plan, build and maintain their information technology infrastructure with headquarters in Norcross Georgia, and nine offices in the United States. Today, Softchoice entered into a definitive purchase and sale agreement and expects that the acquisition will close this week, subject to normal closing conditions.

Under the terms of the agreement Softchoice is paying US$38.1 million in cash to acquire the privately held company with a deferred payment of up to US $9 million, payable during 2008 depending on the financial performance of Optimus Solutions. On a trailing 12-month basis, Optimus Solutions generated US$140 million in revenue. Approximately 40 percent of Optimus’ revenue during this period was derived from the enterprise market segment, 50 percent from the mid-market segment and 10 percent from the public sector. Approximately 87 percent of this revenue is from hardware sales, 7 percent is attributable to the sale of software, and the remainder from services. Optimus employs 100 people and services 1500 customers with no single customer representing more than 12 percent of total revenues. Softchoice expects the transaction will be accretive to earnings in 2008. Funding for the transaction was provided by a loan from a Canadian chartered bank.

The acquisition significantly enhances Softchoice’s ability to provide advanced hardware technology solutions and services, including internetworking, server consolidation, and security solutions to U.S. mid-market, enterprise and public sector organizations.

Benefits from the transaction include the following:

– Completes Softchoice’s market coverage by enabling the Company to deliver hardware solutions across all U.S. market segments;

– Extends Softchoice’s Microsoft Enterprise Agreement expertise, virtual supply chain technology and TechCheck(TM) assessment services to Optimus Solutions’ customer base;

– Broadens Softchoice’s customer platform in the U.S. and supports the Company’s overall strategic plan to grow its market share along three dimensions – (1) in both hardware and software sales; (2) in Canada and the U.S.; (3) and across the mid-market, enterprise and public sector segments.



“Through our growth strategy we’ve extended the Softchoice platform across all key product and market segments, creating a springboard for the next phase of our growth,” said David MacDonald, President and CEO of Softchoice. “With the acquisition of Optimus Solutions, we now have the ability to help customers address virtually every stage of the technology lifecycle – from solution design, fulfillment and implementation through to disposal. Looking ahead, our focus is on leveraging these assets to achieve our goal of becoming one of the top five solutions providers in North America. Through this process we look forward to enhancing the value we provide our customers, creating growth opportunities for new and existing employees and maximizing returns for our shareholders.”

Softchoice’s success as a leading technology provider in Canada and to the U.S. mid-market coupled with strategic investments in its high velocity supply chain has laid the foundation for the current phase of the Company’s growth strategy. Since October 2007, Softchoice has leveraged selective acquisitions to increase its reach in key market segments and enhance customer value. On October 12th 2007, Softchoice acquired the Technology Solutions and Professional Services divisions of NexInnovations, a Canadian-based enterprise solutions provider. Two months later, on December 11th, Softchoice completed the acquisition of Software Plus, the ninth largest Microsoft LAR in the U.S. and a leading provider to enterprise and academic organizations. The acquisition of Optimus Solutions complements these previous transactions in terms of market focus and regional presence. Management believes the transaction will strengthen Softchoice’s ability to serve the hardware technology requirements of U.S.-based enterprise and public sector organizations while providing the opportunity to extend the Company’s expertise in IT assessments and software licensing to an entirely new set of customers.

“Optimus and Softchoice both bring distinct, industry-leading capabilities to the mix,” said Steve Johnson, President of Optimus Solutions, who will become Vice President of Softchoice. “As a value-based organization, we have an intense focus on working closely with key partners such as Cisco and IBM to deliver advanced IT solutions to U.S. businesses. Combining this expertise with Softchoice’s fulfillment engine, its standing as a top Microsoft LAR and its geographic reach will give our people the opportunity to augment our services expertise with a much more competitive set of volume-based offerings. Ultimately this is about giving our customers and our people the best of all worlds. “

The management team is pleased to report that Steve Johnson will carry on in his capacity as President of Optimus Solutions for a minimum of two years.