M&A Summary Q2 2019 - Technology & Life Science

August 07, 2019

Deal volumes involving Canadian technology businesses were slightly down during the last four quarters ended Q2-19 (L4Q19), with 319 deals announced or closed during the period (93 of which came during Q2-19). This represents a moderate decrease from the 329 transactions announced or closed in 2018. Although there has been a decline in the L4Q19 period, the past three quarters have been quite strong relative to historical periods.

Continuing a trend from prior periods, the popularity and attractiveness of vertical market software businesses servicing niche markets remains strong. These businesses garner a lot of attention due to their sticky revenue base, courtesy of the tailored approached of developers and industry expertise of sales people and account managers. Outlined below are four vertical market software deals from Q2-19.

One of the most interesting deals in this sector is the acquisition of Intelex Technologies by Industrial Scientific. Intelex is a leader in the environmental, health & safety, and quality management space. Announced on the 6th of June, Intelex is to be acquired for CA$762m (US$570m), one of Canada's five largest tech company exits in the last 10 years and the highest purchase price of any global EHSQ software vendor. It reflects the potential for cloud computing, internet-connected devices and IT/OT systems to revolutionize industrial business models, just as warehouse robotics from Amazon has transformed the retail sector. Furthermore, it demonstrates Canada's continuing development into one of the global leaders in technology.

Select Technology Transactions - Q2 2019
Target Buyer Date Transaction Description
Wave Financial Inc. "Blue Fountains International, ULC (Subsidiary of H&R Block)" 6/11/2019 Wave Financial Inc. has been acquired by H&R Block (NYSE: HRB) on June 11, 2019 for $538 million CAD. Wave Financial Inc. is based in Toronto, ON and provides cloud-based integrated software and tools for small businesses which include accounting, payroll, payment, and receipt management tools. H&R Block, Inc. is based out of Kansas City, MO and provides assisted income tax return preparation and virtual tax preparation services and products. This acquisition strengthens H&R Block's growth trajectory and expands their reach within the large and growing SMB market.
Intelex Technologies Inc. Industrial Scientific Corporation 6/6/2019 Intelex Technologies Inc. has been acquired by Industrial Scientific Corporation on June 6, 2019 for $762 million CAD. Intelex Technologies Inc. is based out of Toronto, ON and develops web and mobile software solutions for environmental, health, safety and quality management in North America. Industrial Scientific Corporation is based out of Pittsburgh, PA and develops and manufactures gas detection products and accessories. The acquisition strengthens Industrial Scientific Corporation's offering, allowing delivery of a one-stop shop for Environmental, Health, Safety and Quality automation solutions.
Chronogolf Inc. Lightspeed POS Inc. (TSX:LSPD) 5/30/2019 Chronogolf Inc. has been acquired by Lightspeed POS Inc. on May 30, 2019 for $18 million CAD. Chronogolf Inc. provides cloud-based CRM software tools that enable golf courses to identify and understand their customers, attract new players and optimize their tee-time sheet with relevant statistics and data analytics. Lightspeed POS Inc. is a leading cloud-based POS software solutions for SMBs based in Montreal, QC servicing customers globally. The acquisition enables Lightspeed to further penetrate the golf industry with a solution created specifically for this industry.
Smooch Technologies Inc. Zendesk, Inc. (NYSE: ZEN) 5/22/2019 Smooch Technologies Inc. has been acquired by Zendesk, Inc. on May 22, 2019. Smooch Technologies Inc. is based out of Montreal, QC and develops a cloud-based, omni-channel messaging platform for SMB and enterprise clients. Zendesk, Inc. is based out of San Francisco, CA and provides customer support SaaS products to organizations of all sizes. This acquisition enables Zendesk to expand its customer support by leveraging Smooch Technologies omni-channel messaging solutions.

Buyer Target Geography

Deals announced

Deals involving Cadnadian Business

Please contact our Corporate Finance team to learn more about these transactions.