Softchoice Closes IPO, Moves To Cement Status As Largest Microsoft Cloud Partner

‘The timing just seemed right, and so we felt this was a good time to do that as a natural evolution as a company,’ says Softchoice CEO Vince De Palma of the company’s move to go public.

Software and cloud solution provider Softchoice Tuesday became the latest channel company to go public when it successfully completed its IPO on the Toronto Stock Exchange, with 17.5 million common shares sold for gross proceeds of C$350 million, or about $249 million.

Softchoice, which actually started trading under the symbol “SFTC” on Friday on an “if, as and when issued” basis, sold 4.375 million common shares, while Birch Hill Group sold 13.125 million common shares.

For Softchoice, ranked no. 32 on the CRN 2021 Solution Provider 500 list, the time was right for the IPO, said Vince De Palma, CEO of the Toronto-based solution provider.

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“We have been on a growth journey, and we believe the IPO is a natural evolution of this growth [run] we’ve been on,” De Palma told CRN. “And partly because the IPO opens us up to more investment that will allow us to add to this growth. So the timing just seemed right. And so we felt this was a good time to do that as a natural evolution as a company.”

Softchoice, a software-focused IT solutions provider, focuses on helping organizations to be agile and innovative, De Palma said. The company is Microsoft’s largest cloud deployment partner and Microsoft Azure partner in North America as ranked by Microsoft itself, he said.

Softchoice attained that rank via a focus on three areas, including helping businesses take advantage of the cloud, helping them take advantage of digital workplace and collaboration technology, and leveraging 30 years of software asset management history, De Palma said.

“So when you look at those three things combined, our three main focus areas, clearly Microsoft has a lot of technology that fits into that,” he said. “Microsoft Azure in the cloud, Microsoft Office 365, and other things in digital collaboration [like Teams]. So Microsoft’s a great partner, along with many other technology partners we work with, and they fit clearly into our main focus areas.”

Softchoice also has major relationships with hybrid and public cloud-focused vendors such as Amazon Web Services, Google, Cisco, VMware, Red Hat, FireEye and CrowdStrike, he said.

De Palma called Softchoice a profitable growth company with annual revenue of about $1.7 billion and $238 million in gross profit. About 57 percent of the company’s net sales are in U.S. and 43 percent in Canada, he said.

During the first fiscal quarter of 2021, Softchoice drove 11 percent year-over-year growth in terms of gross profit, De Palma said.

“And we do believe that reinforces that customers have come back in terms of pursuing their digital transformation agendas,” he said. “And that reinforces our confidence in our double-digit growth outlook. So we’re very optimistic that we will drive over 12 percent organic growth between this year and next year.”

Softchoice was a pioneer in the Microsoft market and was formerly known as Microsoft’s largest LAR, or large account reseller.