St. Louis-based tech services company World Wide Technology agrees to acquire Canadian IT provider Softchoice in an all-cash deal valuing Softchoice at ~CA$1.8B
One last mega-deal closed out an eventful 2024. — On Tuesday, World Wide Technology (WWT), a tech services company based in St. Louis …
Context & Ripple Effects
WWT already had a sizable IT procurement-and-installation business serving clients including the US federal government, as described in its earlier profile of WWT's procurement and installation work. The proposed purchase places another IT provider inside that established platform.
The deal also fits a record of cross-border services transactions in the coverage, including DXC's planned acquisition of Swiss developer Luxoft. It matters because it combines two IT-services organizations rather than adding a narrowly defined software product.
First-order effects
- Softchoice is set to be acquired by WWT in an all-cash transaction valued at about CA$1.8 billion, subject to completion.
- WWT commits to bringing a Canadian IT provider into its organization, expanding the scope of the business it already operates in IT procurement and installation.
Second-order effects
- The combined company becomes a larger rival for IT-services providers competing for enterprise technology work, particularly where procurement, deployment and provider relationships are important.
- The transaction gives other services buyers and sellers a fresh cross-border consolidation benchmark, alongside deals such as DXC's Luxoft acquisition.
Third-order effects
- If comparable combinations continue, IT services may increasingly be organized around fewer, broader providers that bundle procurement, deployment and related expertise.
- That model raises the importance of integration: the value of acquired specialist teams depends on retaining their customer relationships and capabilities rather than simply combining corporate ownership.
The trend: Cross-border consolidation is broadening IT-services platforms as providers seek greater scale and a wider set of customer capabilities.