Archive for M&A Activities

Square Buys Toronto-based Kili Technology

Square – the mobile payments and merchant services company that has raised nearly $600 million in venture capital since its founding in 2009 by Twitter co-founder Jack Dorsey – has acquired Toronto-based payment processing and authentication solutions company Kili Technology.

Kili was founded by fintech veteran Greg Wolfond and Afshin Rezayee as a spin-out from SecureKey, an identity authentication technology company based in Toronto that was also founded by Mr. Wolfond.  Follow the acquisition, Kili’s operations will remain in Toronto and its office there will become Square’s second Canadian location, after having previously opened an office in Waterloo.  Financial details of the transaction were not disclosed.

To read more, click here.

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Bad Times Could Mean Opportunistic Buying in Canada

A March 2015 study by Citi and Mergermarket found that growth in Canadian M&A activity is expected throughout the next year. Respondents to their survey viewed the three main factors leading to a rise in deal volume to be inorganic growth, sales of private businesses, and strong company valuations.

The current state of the economy is predicted to have a positive impact on future deal-making. The fall in the value of the Canadian dollar is predicted to be beneficial for increasing M&A activity, by reducing the price of cross-border acquisitions for US companies coming into Canada. Furthermore, with reduced ability to create growth organically, companies may begin looking for acquisitions as an alternative method of increasing revenues. Despite declining Canadian M&A activity over the previous three quarters, a positive change is predicted in the coming months.

To read the full article on Canadian M&A, click here

For the Citi and Mergermarket report, click here

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IntelliResponse Sold to [24]7

Congratulations to David Lloyd and the rest of the team at IntelliResponse on the sale of their company to [24]7.  Based in Toronto, IntelliResponse was founded in 2000 and is a leading provider of customer experience management solutions for enterprise clients, with a focus on chat messaging and support tools.  [24]7 is also in the customer experience management space and generates roughly $250 million in revenue.  Financial details of the transaction were not made public.

For further information, click here.

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Q1 Announcement – Assets of Jana Laboratories Acquired by NSF International

Q1 Capital Partners is pleased to announce the strategic acquisition of the testing assets and laboratory operation of its client, Jana Laboratories Inc., by Ann Arbor, Michigan-based NSF International. Jana Laboratories’ 14-person laboratory staff and 20,000-square-foot laboratory in Aurora, Ontario will be renamed NSF Janalab and become part of NSF’s global network of ISO/IEC 17025 accredited laboratories throughout North and South America, Europe and Asia.

Jana Laboratories is an engineering consulting and laboratory testing firm that serves the global water and plastic pipe industries. The Company has over 45 years of piping systems testing expertise, globally recognized engineering capability, the largest Oxidation Resistance Test and Analysis capability, and the largest Hydrostatic Test capacity in North America. NSF’s acquisition of Jana’s testing assets and laboratory operation along with its existing global laboratory capabilities combine to make NSF one of the leading providers of performance and health effects testing and certification for the global plastic pipe industry.

Jana has experienced significant growth in its consulting business over the past few years and the sale of the testing assets to NSF enables Jana to focus its entire efforts on that fast growing and lucrative side of the business.

About Q1 Capital
Q1 Capital Partners is a Toronto-based corporate finance advisory firm specializing in mergers and acquisitions for private Canadian companies in the information and communication technology, digital media, and traditional business sectors. Q1 focuses it expertise on identifying foreign strategic acquirers who understand the value created by Canadian businesses. Our team of seasoned professionals offers depth of experience in M&A deal execution and a solid background working with innovative companies in a wide variety of industries. Clients engage us for our transactional experience, insight, integrity, dedication, and exceptional service. Q1 is an Ontario Securities Commission licensed Exempt Market Dealer
www.q1capital.com

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Q1 Announcement – Clay Tablet Technologies Acquired by Lionbridge Technologies

Q1 Capital Partners is pleased to announce the strategic acquisition of its client, Clay Tablet Technologies (CTT), by Waltham, Massachusetts-based Lionbridge Technologies, Inc. (NASDAQ: LIOX). With 2013 revenues of US$489 million, Lionbridge is the world’s leading provider of translation and localization services and works with hundreds of global market leaders including Adobe, Canon, Caterpillar, CBS interactive, Cisco, Dell, Eli Lilly, EMC, Expedia, Golden Living, Google, HP, LRN, Microsoft, Motorola, Nokia, Pearson, Pfizer, Philips, Porsche, PTC, RIM, Rolls Royce, Samsung, and the US Department of Justice.

Founded in 2005 by Robinson Kelly and Ryan Coleman, Toronto-based Clay Tablet Technologies is globally recognized as the leading provider of translation integration solutions. The acquisition of Clay Tablet will allow Lionbridge to provide a complete portfolio of services and technologies that enable clients to seamlessly create, manage, and optimize global digital customer experiences across every channel including web, email, and social media platforms.

In addition to being an integral part of Lionbridge’s translation offering, CTT will continue to provide the only neutral platform for connecting CMSs to any translation firm or technology with incredibly feature-rich, enterprise–class CMS connectors. Importantly, Lionbridge is hiring all of CTT’s employees and will be maintaining CTT’s Canadian operation.

Robinson Kelly, CEO of Clay Tablet Technologies Inc. commented: “We simply could not have succeeded in this transaction without Q1 and Mike’s great team. The challenge in such deals is that you don’t know what you don’t know. But Mike’s extensive experience provides that knowledge – and he navigates those challenges with a perfect balance of tact, conviction, and strength. His negotiation skills absolutely increased the value received by Clay Tablet’s shareholders and I would certainly recommend Q1 to any entrepreneur considering the sale of their business.”

About Q1 Capital
Q1 Capital Partners is a Toronto-based corporate finance advisory firm specializing in mergers and acquisitions for private Canadian companies in the information and communication technology, digital media, and traditional business sectors. Q1 focuses its expertise on identifying foreign strategic acquirers that understand the value created by Canadian businesses. Our team of seasoned professionals offers depth of experience in M&A deal execution and a solid background working with innovative companies in a wide variety of industries. Clients engage us for our transactional experience, insight, integrity, dedication, and exceptional service. Q1 is an Ontario Securities Commission licensed Exempt Market Dealer.
www.q1capital.com

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Good Times for Fundraising in Canada

The past few weeks have seen some impressive fundraising activity among noteworthy Canadian technology companies.  This is great news not just for the recipients of this new capital but for Canada’s tech ecosystem as well.  These transactions include:

Zafin, which is based in Vancouver and makes relationship banking software, raised $15 million in growth equity capital from Kayne Partners, bringing its total funding to date to $20 million.  This capital will allow the company to expand its line of software products and to increase its international sales and marketing efforts.

Scribble, the Toronto-based content engagement and publishing platform provider, raised $12 million in Series C venture capital funding from existing investors Rogers Venture Partners, Summerhill Venture Partners, Georgian Partners, and Export Development Canada as well as new investor Waterloo Innovation Network.  This capital will allow the company to open overseas offices as well as to make further acquisitions following its purchase of CoveritLive earlier this year.  This investment brings Scribble’s total capital raised to date to almost $24 million.

REGEN Energy, the Toronto-based provider of electricity demand management systems, raised $12 million in Series B venture capital from existing investors BDC Capital and NGEN Partners as well as new investors EnerTech Capital, Export Development Canada, and an American utility company.  This capital will help the company expand the commercialization of its SWARM Energy Management system that helps commercial and industrial users to significantly reduce their electricity consumption.  The company has now raised a total of $25 million in capital through five rounds of fundraising.

Hubub, a social community and content platform that is also based in Toronto, raised $5 million in equity capital from Bell Media.  The company’s platform is currently in beta and a full release is expected sometime this month.  It has now raised a total of $14 million in capital.

These companies have managed to attract significant amounts of capital that will hopefully allow them to commercialize their software and hardware platforms well beyond the Canadian market.  They join other Canadian companies that have recently raised later stage rounds of equity capital funding in the eight-figure range from existing investors here in Canada as well as new investors from the US and overseas.

This is a very welcome development in the Canadian tech landscape.  Where previously companies such as these would hit a funding wall and have to be acquired by large foreign buyers at an early stage or else become irrelevant because they lacked the capital required to expand their sales and marketing beyond our borders, now they have a chance to become successful, internationally recognized technology leaders, acquirers of emerging competitors, and much larger acquisition targets themselves or candidates for substantial initial offerings in the public markets.

They are also increasing their headcounts, purchasing new equipment, and occupying larger office and industrial spaces.  This is certainly welcome news, and not just for those of us who work in or provide services to the Canadian technology community.

Posted in: M&A News, PE/VC News

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Toronto’s Bering Media Acquired by Audience Partners

Congratulations to the principals at Toronto’s Bering Media on the sale of their company to Audience Partners, a Pennsylvania-based company that offers an advertising management platform that enables programmatic ad buying targeted at audiences on an array of devices.  Bering Media, which was founded in 2008 and had received $7.5 million in funding from local sources, is an audience network for broadband and mobile network operators.  Terms of the acquisition were not disclosed.

To read more about the transaction, click here.

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The Youth-Focused M&A Boom

New York Magazine recently featured an article suggesting that many of the recent notable M&A transactions in the technology and media industries have been fueled by a desire on the part of large, established companies to chase the eyeballs and pocketbooks of Millennials, also known as Generation Y or those born between 1980 and 2000.

Whether it is Apple’s acquisition of Beats, Facebook’s acquisitions of Whatsapp and Oculus, or Time Warner’s investment in Vice Media, the author believes that these transactions – some of which have puzzled people with their unclear strategy objectives and astronomical valuations – are driven in large part by a need to stay relevant to today’s young consumers.

The article is definitely worth checking out and readers will certainly draw their own conclusions regarding the validity of this theory and whether or not it is a sensible acquisition strategy for large companies.  What cannot be denied is that there is indeed a land-grab underway in the media and tech sectors.  Companies that are focused on the youth market and have managed to capture a large audience or group of buyers in this demographic should be paying close attention to what is taking place, because while the children may be the future, large companies may quickly realize that it is the grown-ups who have longer attention spans and fatter wallets, thus making them the truly more desirable market.

To read the full article from New York Magazine, click here.

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Good Technology Acquires Toronto-based Fixmo

On June 3, Good Technology announced the acquisition of certain assets of Fixmo Inc., including Fixmo U.S., and its plans to integrate Fixmo’s Sentinel Integrity Services and other key products into Good’s secure mobility platform.  While terms of the deal were not disclosed, the acquisition brings to an end the patent infringement lawsuit filed by Good against Fixmo in January 2012.  Good intends to complete an initial public offering and filed its Form S-1 in mid-April.  We will see details of this acquisition when Good files an Amendment to its S-1.

Fixmo is one of a handful of small private Canadian technology companies that have been able to raise substantial capital without participation from OMERS Ventures.  Fixmo was founded by Shyam Sheth and Rick Segal in July 2009 and managed to raise more than $30 million in capital from Extreme Venture Partners, RHO Capital Partners, iNovia Capital, Panorama Capital, Kleiner Perkins Caufield Byers, Paladin Capital Group, Horizons Ventures, Rho Canada, Motorola Solutions Venture Capital, and Samsung Ventures.

Fixmo had been rumoured to be for sale so this transaction should not come as a surprise.  Good’s acquisition of Fixmo makes sense as it would be difficult for a large strategic acquirer to step up to the plate with the infringement case outstanding.  Besides, Good completed a similar transaction in 2009 when California-based Visto filed a patent suit against Good Technology, at that time a division of Motorola.  Motorola ended up selling Good to Visto, which ended the suit and was followed by Visto renaming itself Good Technology.  Let’s hope that the transaction turns out to be a reasonable one for all Fixmo investors.

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