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This deal appeared to come out of the blue. Bridge Growth Partners, a New York equity firm, revealed Wednesday it had acquired a majority stake in Solace Systems – one of Ottawa’s more promising high-tech firms.
But when you pull the transaction apart, this surprise $100 million plus equity deal is as logical as they come. The startup’s many investors were looking for a way to get some of their money out at a profit and Bridge Growth gave it to them.
Bridge Growth, of course, expects to do well by this investment.
“Solace is a jewel in the Ottawa tech community,” said Tom Manley, a senior principal with Bridge Growth. “They’ve been flying under the radar for some time but they’ve built some very disruptive technology.”
Solace Systems specializes in products – universal translators – that expedite the flow of traffic between data centres, smartphones and software applications. Its technology could become a key component of tomorrow’s Internet.
Company founder and CEO Craig Betts got the idea for Solace Systems when he worked for a time as a systems integrator – and grew frustrated at the difficulty of making software applications talk to one another.
Manley – a former top financial executive at Cognos and Nortel Networks – is very familiar with the Ottawa Valley. He has known Betts socially for years. Manley is also well acquainted with Terence Matthews, an early investor in Solace Systems and its current chairman. Conversations that led to the change of control began last fall.
A significant though minority portion of the New York firm’s investment will help boost Solace Systems’ cash reserves, allowing the firm to more aggressively market its technology.
Since its inception in 2001, Solace Systems has raised more than $60 million from a handful of venture firms ranging from a unit of the Ontario Teachers’ Pension Plan to Tandem Expansion Fund. Most venture firms like to cash out of investments after seven to ten years.
Of note, none of the original investors cashed out its entire stake. They all want to continue this ride in some form. “For Solace, this wasn’t a financial event,” said Manley. “It was more a strategic thing,” he added in reference to his equity group’s long list of global contacts.
Indeed, Solace Systems could have raised money by issuing shares through an initial public offering – much as Shopify, Ottawa’s e-commerce star, did a year ago. After all, Solace Systems has been profitable over the past couple of years, and it has developed a loyal base of customers around the globe.
But the company decided the Bridge Growth deal gave it more options. “The IPO is something we talk about,” said Solace Systems’ chief financial officer Ken Wigglesworth, “but we’d like to go public as a sizeable, more mature company.”
That is Bridge Growth’s preferred option as well.
Email: jbagnall@postmedia.com
Twitter.com/JamesBagnall1
查看原文...
But when you pull the transaction apart, this surprise $100 million plus equity deal is as logical as they come. The startup’s many investors were looking for a way to get some of their money out at a profit and Bridge Growth gave it to them.
Bridge Growth, of course, expects to do well by this investment.
“Solace is a jewel in the Ottawa tech community,” said Tom Manley, a senior principal with Bridge Growth. “They’ve been flying under the radar for some time but they’ve built some very disruptive technology.”
Solace Systems specializes in products – universal translators – that expedite the flow of traffic between data centres, smartphones and software applications. Its technology could become a key component of tomorrow’s Internet.
Company founder and CEO Craig Betts got the idea for Solace Systems when he worked for a time as a systems integrator – and grew frustrated at the difficulty of making software applications talk to one another.
Manley – a former top financial executive at Cognos and Nortel Networks – is very familiar with the Ottawa Valley. He has known Betts socially for years. Manley is also well acquainted with Terence Matthews, an early investor in Solace Systems and its current chairman. Conversations that led to the change of control began last fall.
A significant though minority portion of the New York firm’s investment will help boost Solace Systems’ cash reserves, allowing the firm to more aggressively market its technology.
Since its inception in 2001, Solace Systems has raised more than $60 million from a handful of venture firms ranging from a unit of the Ontario Teachers’ Pension Plan to Tandem Expansion Fund. Most venture firms like to cash out of investments after seven to ten years.
Of note, none of the original investors cashed out its entire stake. They all want to continue this ride in some form. “For Solace, this wasn’t a financial event,” said Manley. “It was more a strategic thing,” he added in reference to his equity group’s long list of global contacts.
Indeed, Solace Systems could have raised money by issuing shares through an initial public offering – much as Shopify, Ottawa’s e-commerce star, did a year ago. After all, Solace Systems has been profitable over the past couple of years, and it has developed a loyal base of customers around the globe.
But the company decided the Bridge Growth deal gave it more options. “The IPO is something we talk about,” said Solace Systems’ chief financial officer Ken Wigglesworth, “but we’d like to go public as a sizeable, more mature company.”
That is Bridge Growth’s preferred option as well.
Email: jbagnall@postmedia.com
Twitter.com/JamesBagnall1
查看原文...
