Canadian IT services provider Softchoice is set to be acquired by digital infrastructure provider World Wide Technology (WWT) for CA$1.8 billion ($1.25bn).

Announced on New Year’s Eve, the all-cash deal will see St. Louis-based WWT pay CA$24.50 per share to acquire Softchoice. The deal has been approved by the Softchoice board, and will now require the thumbs up from shareholders.

Softchoice provides a wide range of cloud and data center-related services, including a data center modernization package, and helps businesses manage the process of migrating data and systems away from on-premises data centers to the cloud.

WWT, meanwhile, is more focused on providing digital infrastructure such as servers for businesses, and Andrew Caprara, Softchoice president and CEO, believes they will work well together.

“We are excited to join WWT,” Caprara said. “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.

“I believe WWT is the ideal partner for our customers and employees, and I’m excited about our future as a combined firm.”

Softchoice, which was founded in 1989, has been listed on the Canadian Stock Exchange since 2021, when it IPO’d at a value of CA$1.15 billion ($800m). It will be delisted if the deal goes through. The acquisition is expected to close in the first half of 2025, and if it collapses Softchoice will be liable for a CA$49 million ($34m) termination fee.

WWT has annual revenue of around $20 billion. According to its website, the company operates around 500 racks across five of its own data centers – many in St. Louis, Missouri – and leases space in an Equinix facility in Ashburn, Virginia. Last March, the company teamed up with Google Cloud to offer sovereign cloud services to US government departments.

Jim Kavanaugh, WWT co-founder and CEO, added: “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.”