Wi-Lan buys tech firm VIZIYA Corp.
Jumps into Internet-of-Things sector
Mark it down as another case of a slip between the cup and the lip — even if in this case, not a drop was spilled.
Six months ago, Hamilton Ont.-based VIZIYA Corp. planned to go public via a transaction with Halifaxbased Nobelium Tech Corp., a capital pool company.
The purchase price for what was to be Nobelium’s qualifying transaction was US$ 34 million. And once VIZIYA — which defines itself as “a software and services provider that helps companies optimize their asset performance,” and which has seven offices outside of Canada — was public, the goal was to become a more focused version of Constellation Software, a company that’s long been an investor favourite. It would get there through a series of acquisitions.
That transaction did not close, a fact announced by Nobelium last month. For Nobelium, which raised $ 350,000 in its IPO, calling off the transaction meant that it forfeited its $ 25,000 non- refundable deposit. Trading in Nobelium shares, which had been halted at the end of October, hasn’t resumed. As part of the deal not closing, director Erroll Treslan replaced John Varghese as Nobelium’s chief executive.
Now comes word that Ottawa-based Wi-Lan Inc. has acquired VIZIYA or, to be perfectly accurate, has “entered into a definitive agreement” to acquire the company. The purchase is expected to cost about $40.5 million.
As with Nobelium’ s planned purchase of VIZIYA, Wi-Lan will pay for the acquisition in two parts: about 60 per cent of the purchase price due on closing with the rest being subject to earn out provisions.
Under normal circumstances, W i-L an, whose business is patent licensing, would not be considered a likely purchaser.
But a few weeks back it announced a new growth strategy “to transform its business into a growth- oriented diversified holding company by acquiring businesses that will operate alongside the Company’s intellectual property licensing business.”
Wi-Lan also made a series of executive changes that included the naming of an executive chairman and an interim chief executive. It added a new director, Ian McKinnon, who is also a Constellation director.
The company is al s o changing its name: Wi- Lan was out and Quarterhill was in. The new Wi-Lan planned on acquiring technology companies in the industrial Internet- of-Things segment across multiple verticals.
VIZIYA is its second acquisition. Earlier, for $63.5 million, it acquired TSX- listed International Road Dynamics. So how did it happen? The opportunity for WiLan arose because Nobelium, which had its own ambitious acquisition strategy, couldn’t raise the capital necessary to close the VIZIYA purchase within the time frame provided by the letter of intent.
Enter Mike Lauzon, an investment banker at Canaccord Genuity, who introduced Varghese to Wi- Lan. In turn, Varghese was asked to join Wi-Lan and be part of the team working with their evolving strategy regarding the industrial Internet of Things.
In short order, a match was made: Wi- Lan took a fondness to VIZIYA while VIZIYA took a liking to the evolving strategy at Wi-Lan. The buyer and the seller — with the assistance of Canaccord Genuity — then negotiated the transaction.
John Vujicic, VIZIYA’s chief executive, said the Wi- Lan transaction “will give us the access to resources that will help us continue to build and grow our business.”
Wi-Lan said VIZIYA meets “all” the criteria it has set for its new growth business.
The final part of the story: Varghese a veteran of the world of venture capital and investment banking, is the new senior vice- president of corporate investments at Wi- Lan, whose task is now to implement the Internet of things growth strategy.