Posts Tagged Q1 Capital Partners

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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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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January 2014 Newsletter

Mike’s Commentary:

Is Ecobee Next?

Google’s $3.2 billion acquisition of Nest Labs is not only a monumental event for that company but could also turn out to be a game changer for Toronto-based Ecobee.  The acquisition shines a light on the “conscious home” space and validates the foresight and work of Stuart Lombard and his team to develop the Ecobee line of programmable WiFi enabled smart thermostats. Unfortunately, the acquisition also further illustrates the challenges that Canadian technology companies have in attracting the capital and attention necessary to compete in the North American and global markets, as evidenced by the amount of capital Nest Labs attracted and the stable of Tier One US VCs that stepped up to the plate.

Founded in May 2010, Palo Alto-based Nest Labs is a home automation company that designs and manufactures sensor-driven, WiFi-enabled, self-learning, programmable thermostats and smoke detectors.  The company’s founder and CEO is Tony Fadell, a former Apple executive and designer of the iPod, which of course brought the Company instant notoriety.  Nest Labs reports that it has over 25,000 certified professionals who help install Nest in the US and Canada and has more than 300 employees spread across three countries.
(continue reading…)

Getting Another “Keek” at the Can

In November, we came across news that Keek had found it challenging to attract new investors and, as a result, looked to the public markets for capital.  Given the $30.5 million that was invested since October 2011 and the haircut that those investors will now take, this is not good for anyone.  The founders and investors lose and a large amount of capital has now been erased from the Canadian capital pool.  And while we all understand that venture investing has high risks, a company that apparently had such high prospects and needed to be restructured so quickly simply leaves a bad taste in everyone’s mouth.

While we certainly sympathize with the challenges of raising a large round of private capital in Canada, we do like the fact that the Company’s current investors took action to replace management and restructure it with a team that apparently is focused on finding a revenue model that works, accessing whatever capital they could find in order to survive, cutting the Company’s burn rate, and is looking to complete a private placement quickly to get new funds.  (continue reading…)

Evan’s Commentary:

2013 Was a Great Year for Tech M&A…But Not Everywhere

January is a good time to reflect on the year that just passed and to make resolutions for the year ahead.  But instead of a list of the top news stories of 2013 or resolutions about eating better and exercising more, here are some findings from the M&A market in the past year and a resolution that those of us in the Canadian technology sector should try to stick with long after we’ve given up our diets and gym memberships.

When it comes to mergers and acquisitions in the technology sector, 2013 will mostly be remembered for the constant popping of Champaign corks.  Why?  Because according to Mergermarket, global M&A transactions in technology, media, and telecommunications (TMT) totaled US$510.3 billion, an increase of 54.1% from the $331.1 billion in transactions in 2012.  Although TMT M&A has not yet reached the pre-financial-crisis high of $603.8 billion in 2006 and much of the activity was comprised of a small number of mega-deals (the increase in TMT M&A would have been 16.6% if you exclude just a single transaction: Vodafone’s acquisition of 45% of Verizon Wireless for $124.1 billion), there was still reason to celebrate.  TMT M&A in the US amounted to $301 billion, up 70.4% from 2012, and European deals amounted to $132.2 billion, a 97% annual increase in a region that is still largely struggling economically.  (continue reading…)

Rob’s Commentary:

Entrepreneurs Hatch Ideas at U of T’s Startup Weekend Competition

This past weekend, more than 80 University of Toronto students gathered and competed for 24 hours to see who could develop and pitch a winning business idea. This included developing an idea into a business concept and outlining the customer value proposition, revenue model, marketing strategy, partners, and key activities required to get their idea to a minimal viable product.

The event focused on ideation and the team-building process, critical skills required by all successful entrepreneurs. This means the point was to build business models, not companies. While there are many incubators and accelerators that work with entrepreneurs after they have completed university, very few are focused on nurturing these skills while students are still in school. The students who competed will be those who will someday compete for spots at MaRS, the Creative Destructive Lab, or Ryerson’s Digital Media Zone.  (continue reading…)

In Other News:

Congratulations go out to Derek Smyth in his new position as Chief Revenue Officer at Vision Critical, a leading provider of insight community technologies.  During the past seven years, Derek has proven himself to be one of Canada’s most savvy venture investors with stints at OMERS Ventures (where some of the investments that he led included Hootsuite, BuildDirect, Desire2Learn, and  Vidyard), Bridgescale  Partners, and Edgestone Capital.  He is now going back to his roots as an operator, when he was the CEO of Bridgewater Systems and COO of Ironside Technologies.

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