Ottawa’s Kinaxis surges to record high

Software provider’s market value passes $4B amid rally in tech stocks

Software provider Kinaxis Inc. surged to a record high as it completed a deal for Rubikloud Technologies Inc. to boost its artificial intelligence capabilities.

Ottawa-based Kinaxis, whose clients include Unilever NV and Lockheed Martin Corp., briefly passed $4 billion (U.S.) in market value for the first time Thursday amid a broad rally in Canadian technology stocks. The firm sells products that help companies manage supply chains, sales and operations.

Its 103 per cent rise this year makes it the fourth-best performing stock on the S&P/TSX Composite Index. The COVID-19 crisis has helped the business as global supply chains have been disrupted: Kinaxis has seen a 20 per cent increase in user activity since January, chief executive officer John Sicard said in an interview.

The firm seized on Rubikloud to fill a gap in its product lineup. The target company, co-founded in 2013 by Kerry Liu, serves the enterprise retail industry, which Kinaxis did not.

“Retail is not a vertical they’re currently in, but one that obviously, if you want to be a global leader in supply chain, you can’t ignore,” Liu said.

The Toronto startup has also made more advances in artificial intelligence and machine learning than Kinaxis has, Sicard said. These include helping clients predict the demand for an item so that they can determine appropriate pricing, according to Liu.

The $60-million cash deal, announced June 15, had been in the making for a few months. Although the two companies had known each other for years, it was only this year when talks started to heat up. At a dinner at Sicard’s home in Kanata, an Ottawa suburb, the two men found themselves “nearly finishing each other’s sentences,” Sicard said.

Soon after, they decided to join forces.

Liu will lead strategic innovation at the company.

“I see myself continuing to be an evangelist in the space,” he said.

Rubikloud is Kinaxis’s second acquisition since going public in 2014. In February, it bought Indian firm Prana Consulting Services Pvt. Ltd. for an undisclosed sum.

The stock is well-liked by analysts with 10 buy ratings, two hold recommendations and no sells, according to data compiled by Bloomberg.