2011 was a year that saw several Canadian ICT Industry leaders picked-up by foreign technology multinationals. Industry leaders such as Algorithmics, MKS, Bridgewater Systems, Platform Computing, March Networks, MXI Security and many others were acquired over the course of the past year and will either not appear on this year’s Branham300 or this year’s edition of the listing will be their last to rank alongside Canada’s most prominent technology companies.
While the Top 5 Canadian ICT M&A Deals of 2011 listed below only include transactions where a Canadian ICT Company is being acquired, several examples in which Canadian ICT leaders acted as the consolidator also occurred in 2011. Notable deals that saw Canadian companies expanding their operations through M&A transactions in 2011 include OnX Enterprise Solutions’ purchase of Agilysis Technology Solutions for $64 Million, BCE’s $40 million buy-out of xwave from Bell Aliant, and Softchoice’s $17 million acquisition of fellow-Canadian UNIS LUMIN, to name a few. While these deals will undoubtedly impact the Canadian ICT Industry moving forward, the following five deals make Branham’s annual listing of the Top 5 Canadian ICT M&A Deals of 2011:
1. Technology Consortium Acquires Nortel Patent Portfolio
Date: July 1, 2011
Players:
- Acquirer: Research In Motion (Current Branham300 Ranking: 1), Apple, EMC, Telefon AB LM Ericsson, Microsoft, and Sony
- Acquiree: Nortel (Current Branham300 Ranking: 14)
Value: US$4.5 Billion
Details: The mega-deal, which was finalized after a fierce four day auction that saw the price-tag for Nortel’s much sought after patent portfolio surpass any analysts expectations, essentially marked the end of Nortel’s bankruptcy proceedings and closed the book on its 116-year-old history. The $4.5 billion dollar bid was won by a consortium comprised of some of the world’s most recognized technology brands, including: RIM, Apple, EMC, Ericsson, Microsoft, and Sony. While not all of the tech juggernauts disclosed their share of the buy-out, Waterloo, Ont.-based RIM reported that its purchase consideration was roughly US$770 million. While the patent portfolio included intellectual property ranging from wireless technology to fibre-optics, and internet search to social networking, it is believed that the players in the consortium participated in the auction to both gain access to the IP and to protect themselves from patent litigation in the future.
2. IBM Acquires Algorithmics
Date: September 1, 2011
Players:
- Acquirer: IBM
- Acquiree: Algorithmics (Current Branham300 Ranking: 40)
Value: US$387 million
Details: The acquisition of Algorithmics by IBM marks the end of one of Canada’s leading software companies and a pioneer within the business analytics and financial risk management space. While Algorithmics was majority owned by Fimalac, a holding company based in France, the company maintained a strong Canadian presence with its corporate headquarters and much of its senior management team in Toronto. When the acquisition closes, Algorithmics along with its 900 employees and 350 clients (including 25 of the top 30 banks) will be integrated into IBM’s Software Group.
3. PTC Acquires MKS
Date: May 31, 2011
Players:
- Acquirer: PTC
- Acquiree: MKS (Current Branham300 Ranking: 74)
Value: CDN$292.5 million
Details: In an effort to bolster its presence in the software application lifecycle management space, Massachusetts-based PTC announced a bid to overtake MKS, one of the oldest software companies on Waterloo, Ont., in an all-cash transaction valued at roughly CDN$292.5 million. With the acquisition, PTC is poised to reshape the way manufacturers integrate hardware and software, with increased focus on product quality, improved time-to-market and reduced costs. After the transaction it was announced that MKS’ chief executive would remain with the company and lead the still Waterloo, Ont.-based operations along with the roughly 200 former MKS employees located in the region.
4. Amdocs Acquires Bridgewater Systems
Date: June 17, 2011
Players:
- Acquirer: Amdocs
- Acquiree: Bridgewater Systems (Current Branham300 Ranking: 49)
Value: CDN$211 million
Details: Following a year in which it posted more than 40% revenue growth, increasing sales from $66.68M in 2009 to $93.38M in 2010, it was announced in mid-June 2011 that Ottawa-based Bridgewater Systems was to be acquired by customer experience systems innovation leader Amdocs for CDN$211 million. The move was made because it enabled the Canadian company to accelerate its corporate growth strategy, and expand across the world with the global reach of Amdocs. Bridgewater Systems continues to operate as a division of Amdocs and the management team that that guided the company through its IPO and recent acquisitions remains in place today.
5. IBM Acquires Platform Computing
Date: October 11, 2011
Players:
- Acquirer: IBM
- Acquiree: Platform Computing (Current Branham300 Ranking: 62)
Value: Financial Terms Not Disclosed
Details: In what was a busy year for Canadian ICT acquisitions for IBM, the U.S.-based multinational announced the takeover of Platform Computing in early-October 2011 for an undisclosed sum. While financial details were not disclosed, it is likely that IBM paid a hefty price for Platform Computing, given the company’s traction in the emerging field of distributed computing, not-to-mention its annual revenues, which reached US$72 million in 2010. The Markham, Ont.-based company brings along with it a list of over 2,000 clients, including 23 of the top 30 largest global enterprises. Platform Computing’s operations will be integrated into IBM’s Systems and Technology Group.
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