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Cisco acquires AppDynamics at huge premium to planned IPO pricing.

According to Tomasz Tungz, Cisco’s US$3.7B acquisition of AppDynamics at 17.3x trailing 12–month revenues represents the biggest software acquisition multiple paid in the last 10 years.

Tungz further writes…” if this acquisition is any bellwether of the 2017 acquisition environment, it’s going to be a monster year. With 30-40 IPOs on the docket for 2017 – a staggeringly large class – many companies may choose AppD’s path of acquisition over going public, especially if they can command such an impressive premium. The median publicly traded SaaS company trades at 6x as of today. The AppDynamics multiple is nearly triple. At the top of the heap, Blackline and Shopify trade at 12-13x.


Source: Tomasz Tunguz Redpoint Ventures

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Shopify Makes Its Third Acquisition

Shopify, the Ottawa-based ecommerce platform that is one of the biggest success stories in the Canadian technology sector these days, announced that it is acquiring San Francisco-based Kit, which offers an online marketing assistant for ecommerce portals.  Terms of the deal were not disclosed.

Kit was founded in 2013 and had raised an undisclosed amount of seed capital from Technicolor Ventures and Visionnaire Ventures in 2014.  Its tools allow online retailers to utilize Facebook to market their products and communicate with customers.

Shopify has been around since 2004 and is regarded as one of the leading Canadian tech companies.  Its platform offers a simple way to set up and maintain an online store with a full suite of ecommerce tools that enable things like payment processing and inventory management.  The company went public last year on the NYSE and TSX, raising over $130 million.  This is the company’s third acquisition but its first since becoming publicly-listed.

To read more about the transaction, click here.

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Waterloo’s Aimetis Acquired By Senstar

Aimetis, a Waterloo-based company that developed a suite of software products to manage security surveillance, is being acquired by Senstar for a reported US$14 million.  Aimetis was founded in 2001 and received $5 million in growth capital from Covington Capital in 2010.  Its software is used in sectors such as retail, government, transportation, and healthcare and enables users to analyze their surveillance video footage and supports camera networks and other security infrastructure.

Senstar is the Canadian division of Magal Security Systems, a provider of security, safety, and site management platforms for airports, seaports, borders, prisons, and other institutions in over 75 countries.  It is based in Yehud, Israel and is publicly traded on the NASDAQ and Tel Aviv Stock Exchange.

For more information, click here.

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Solace Systems Sells Majority Stake to PE Firm

Kanata-based middleware company Solace Systems has sold a majority stake to Bridge Growth Partners, a private equity firm in New York City that makes investments in the technology and financial services sectors.  Terms of the transaction were not disclosed.

Solace Systems was founded in 2001 and manufactures and sells networking software and hardware equipment that enables cloud computing, e-commerce, big data, and other capabilities.  According to the company’s founder, it has raised $80 million in growth capital from institutional investors since its inception.  It plans to use the new capital from Bridge Growth to fund its international expansion strategy and its sales initiatives in the transportation, aviation, and gaming industries.

You can read more about the transaction here.

Posted in: PE/VC News

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Snapchat Snaps Up Toronto’s Bitstrips For $100 Million

Toronto-based emoji maker Bitstrips is being acquired by Snapchat, the popular photo and video sharing mobile app, for a reported $100 million.

Bitstrips allows users to create personalized emojis and avatars that can be inserted into short comic strip sand shared via social media. It was founded in Toronto in 2007 and raised over $18 million in capital from investors that included Kleiner Perkins Caufield & Byers and Horizons Ventures, the investment fund belonging to Hong Kong billionaire Li Ka-shing.  The Bitstrips app has been downloaded over 11 million times.

This is fantastic news for one of Toronto’s best known tech companies in the social media space.  It will be interesting to see if Snapchat keeps the current team and office in place and uses this acquisition to create a presence in Toronto.

To read more about the transaction, click here.

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Hootsuite Makes Its Tenth Acquisition

Hootsuite, the Vancouver-based social media management company, announced it will be making its tenth acquisition since its founding in 2008.  The company plans to buy Sales Prodigy, a mobile app that assists corporate clients with their sales efforts by monitoring the social media activities of their sales leads.

Sales Prodigy is also based in Vancouver and was founded in 2014.  It does not appear to have raised any significant growth capital.  Terms of the transaction were not disclosed.

Hootsuite is one of the best known and most highly regarded Canadian tech companies these days.  It has raised almost $250 million in growth capital from some of the largest and most infuential VC funds in the US and Canada.  It is nice to see that it has been deploying some of this capital towards acquisitions, especially considering at least half of the companies it has acquired have been Canadian.

To learn more, click here.

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Influitive Makes Two Acquisitions

Influitive, a Toronto-based company that has built a software platform for customer advocate marketing, made two acquisitions in March.  At the beginning of the month, the company announced that it was acquiring Ironark Software, a company that developed apps for home organizing and business task management.  Less than three weeks later, Influitive announced that it is acquiring Triggerfox, which has built a mobile platform for relationship management.  The financial details of both transactions were not disclosed.  Both of the acquired companies are also based in Toronto.

Influitive is one of Toronto’s hottest new tech companies.  It was founded by Mark Organ, who previously founded the marketing automation software company Eloqua, which was sold to Oracle for over $870 million in late 2012. The company has raised close to $50 million in growth capital from an array of Canadian and US venture capital funds.

After raising an $8.2 million Series B round at the end of February, Mr. Organ indicated that some of this capital would be deployed as acquisitions, and in March he made good on that promise.  It was encouraging to see that Influitive targeted other Toronto-based companies rather than seeking out software and talent further afield.

To read more about these transactions, click here and here.

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gShift Labs Acquires InNetwork

gShift Labs, which has developed a web analytics platform for digital marketers, announced that it is acquiring Halifax-based InNetwork, an influencer marketing technology platform.  Terms of the deal were not discussed.

Founded in 2009, gShift is based in Barrie, Ontario, just north of Toronto, and has raised $2.1 million in venture capital from GrowthWorks Capital and Brightspark Ventures in addition to $1 million in seed catpial from the MaRS Investment Accelerator Fund and the Ontario Centres of Excellence.  The company’s technology monitors and provides insights into a brand’s web presence and search engine optimization efforts.  It is used by over 10,000 brands in 22 countries.

InNetwork was founded in 2012 and has raised just under $700,000 from angel investors and Innovacorp.  It’s technology allows users to create and oversee influencer marketing campaigns, in which companies engage people with strong social media presences to become ambassadors for their brands online.

To read more, click here.

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Postmedia Acquires Ampifii

Ampifii, a Toronto-based company whose software platform enables users to manage their own sponsored social amplification campaigns, has been acquired by Postmedia Network Canada Corporation, the Canadian media company that includes the newspaper properties once owned by the former Canwest Global Communications Corporation and the Sun Media Corporation.

Details of the transaction were not disclosed.  Ampifii was about a year and a half old at the time it was acquired and had not raised any significant growth capital.  It was formed as part of a native ad campaign project for Postmedia, so this transaction seems to make perfect sense and may represent more of an “acqui-hire” in order to formally bring the team and the technology in-house.

To read more about the transaction, click here.

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Everalbum Acquires Kitchener-Based Pout

Pout, a fashion and beauty photo sharing mobile application based in Kitchener, ON has been acquired by Everalbum, an online photo storage solution for mobile devices that is based in San Francisco.

This is Everalbum’s first acquisition since it was founded in 2013.  It just raised $8 million in venture capital in a Series A round led by Khosla Ventures.

Pout was founded in 2014 and was supported by Velocity, the technology incubator run by the University of Waterloo.  The transaction took shape after Everalbum opened a Canadian office in Kitchener’s historic Tannery building, which the team from Pout will now join.

To read more about the deal, click here.

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