Softcat acquires GDT in $1.05bn ‘enterprise value’ global channel blockbuster deal

“This is a formidable new global competitor that we are all going to have to deal with,” said a US-based SP 500 CEO, who did not want to be identified

Softcat, the number one UK solution provider on CRN’s top VAR list for the last three years, has acquired US-based GDT in a $1.05bn “enterprise value” deal that creates a new global channel powerhouse.

The acquisition combines the UK-based publicly traded Softcat with $2.85bn in revenue and 2,800 employees with GDT, a Dallas-based solution provider with 900 employees and $1.4bn in annual revenue.

H.I.G. Capital, the majority owner of GDT, said the deal has an enterprise value of $1.05bn.

Enterprise value represents the total value of the business being acquired, including debt and excluding cash.

GDT, which has a significant data centre and networking business, will retain its name, leadership team and workforce, operating as a wholly owned Softcat subsidiary.

“This is a formidable new global competitor that we are all going to have to deal with,” said a US-based SP 500 CEO, who did not want to be identified, commenting on the deal.

“Hats off to Softcat for getting ahead of what is sure to be a new era of global competition as customers look for global scale and support for AI adoption and implementation. I expect this trend to continue.”

In the new global solution provider era, $1bn in revenue is minimum table stakes, said the CEO.

“It used to be that $300 to $500 million companies could compete for these global deals,” said the CEO.

“That is no longer the case. You need to be a $1bn-plus player.”

According to a Softcat regulatory filing, the acquisition will be funded through a combination of cash on the balance sheet (£100m), new debt facilities with Softcat's relationship lenders (£550m) comprising a £450m revolving credit facility and £100m term loan, and proceeds from an equity placing (£350m), expected to represent less than 10 per cent of issued share capital.

In its press release, GDT said the deal creates a “market-leading transatlantic IT solutions platform that can support clients with international requirements while also providing growth opportunities in both organisations’ markets.”

GDT said the acquisition is the “culmination” of Softcat’s “multi-year search for a North American company with the scale, capabilities and cultural alignment to support its international growth strategy.”

The deal comes five years after H.I.G. Capital, a Miami-based provider of debt and equity capital to small and mid-sized companies, acquired an 80 per cent stake in the solution provider.

In a press release announcing the deal, H.I.G. said GDT doubled its earnings before interest, taxes, depreciation and amortisation (EBITDA) and increased its mix of recurring gross profit.

“Joining forces with Softcat will benefit every customer, employee and technology partner as well as our respective bottom lines,” said GDT CEO Shawn O’Grady in a prepared statement.

In fact, GDT said customers will gain enhanced global support and deeper technical resources as both sides invest in expanding GDT’s Global Operations Centre in Bangalore.

That investment, GDT said, will enable the centre to provide expanded engineering expertise, optimised business systems and 24/7 service that is increasingly critical in today’s always-on IT environment.

Softcat executive director and CEO Graham Charlton, for his part, said in a prepared statement that customers have repeatedly asked the company to support their technology requirements outside the UK and Ireland, particularly in North America.

“GDT meets every benchmark we looked for to meet that request, including meaningful US scale, an established US enterprise customer base, deep data centre and networking capabilities, and a customer-first corporate culture that matches our own.

“With GDT, we will be creating a company with the scale, talent and technical depth to capitalise on the massive growth opportunities in today’s technology market.”

Softcat said the transaction is expected to close no later than the end of Q1 calendar year 2027, subject to customary regulatory filings and approvals.

Several US-based SP 500 CEOs said Softcat had approached them in recent years investigating the possibility of a deal.

The critical factor in the final price of the deal would have been the percentage of services and recurring revenue that GDT brought to the table, said the SP 500 CEO, who did not want to be identified.

“The higher the services revenue and recurring revenue, the higher the valuation,” he said.

This article originally appeared on CRN UK sister websiteCRN US .