Alithya and Edgewater stockholders approve merger

31 October 2018 Authored by Consulting.ca

Quebec-based Alithya, a privately-held strategy and digital consultancy, and Wakefield, MA-based business and technology consultancy Edgewater (NASDAQ: EDGW) announced the approval of a business combination initially proposed in March.

Edgewater’s stockholders approved the merger with 97.8% of votes, representing about 74.9% of outstanding Edgewater shares. Meanwhile, Alithya shareholders approved the deal unanimously. The merger is expected to close on November 1.

The deal will form Alithya Group, with each of Alithya and Edgewater becoming wholly-owned subsidiaries of the newly-created parent company. The merger will form a North American digital transformation leader, with over 2,000 professionals.

Founded in 1992, Montreal-based Alithya has seven offices in Canada and four in France. It has a workforce of 1,600 professionals, and posted over $200 million in revenues in 2017. Also founded in 1992, Edgewater has six US offices and one Canadian location in Montreal. The company has 400 employees and has annual revenues above US$100 million.Alithya and Edgewater stockholders approve mergerAlithya expects significant revenue synergies from leveraging its consulting competencies across Edgewater’s US network, and vice versa for Edgewater in some of Alithya’s Canadian markets. The firm also expects increased revenue diversification from greater consulting coverage, as well as significant cost synergies from the optimization of corporate functions.

According to an earlier release, Alithya Group is expected to list its common shares on NASDAQ and the TSX, with former Alithya shareholders holding 58% of outstanding shares, and Edgewater shareholders taking the remaining 42%. Edgewater shareholders will also be paid a special dividend of US$20.5 million subject to adjustments.

Alithya’s C-suite will take the helm at the new combined entity, with Paul Raymond as CEO. The new Board of Director will consist of six directors from Alithya and three from Edgewater.

Speaking in March during the initial announcement of the arrangement, Alithya CEO Paul Raymond said, “We believe that, together with Edgewater, we can pursue growth while maintaining the values that have set us apart. This is why we are convinced that bringing our companies together is a great outcome for our clients, our consultants and our respective shareholders.”

Edgewater Chairman and interim CEO Jeffrey Rutherford added, “We went through a very detailed strategic process and were very impressed by Alithya’s management and reputation as a growing corporation.  We believe the combination with Alithya is our best alternative to ensure the ongoing high-quality services to our customers, to give our consultants better career opportunities and to also provide our shareholders with solid, long-term growth perspectives.”

Earlier this year, Alithya appointed Claude Thibault as its new CFO, whose extensive experience in CFO roles at public companies was added in advance of the firm’s preparations to take Alithya public. The company also opened an office in Pickering, ON this summer.

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