By KRYSTLE CHOW
Published in the Ottawa Business Journal newspaper and website.
April 12, 2011 on OBJ.ca (April 18 in the paper edition)

Click here to view this article on OBJ.ca.

No IPO in the works

Networking equipment maker BTI Systems has received $23 million in fresh funds, marking one of the largest local venture financings seen in recent years.

“In the last four to six months, we’ve really been evolving our business in terms of our ability to be a sustainable company in the market we operate in. We wanted to move forward and continue our growth, which is becoming fairly accelerated growth, and there’s a capital requirement for that growth,” says chief executive Steven Waszak.

The new funding round, which was led by a new, unnamed investor, follows a productive 2010 for BTI, including an $11-million financing in November.

Mr. Waszak says BTI saw positive earnings before interest, tax, depreciation and amortization and from a cash flow perspective during the year. The company also achieved record annual revenues as it passed the $52-million threshold, representing growth of 40 per cent year-over-year, and sales for its most recent quarter ended March 31, 2011 rose by about 80 per cent from the same period a year earlier, he says.

BTI now expects to be in the black by the end of fiscal 2011, according to an earlier press release.

On top of that, the firm has now paid off all of its bank debt and converted its convertible debentures into equity as a result of the most recent financing. Add that to the fact that BTI has renegotiated its bank credit agreements, which means the company now has in excess of $30 million in growth capacity.

“We’re strengthening our balance sheet and providing confidence to customers as we proceed on the same path and the same velocity of growth in working towards industry leadership,” says Mr. Waszak, adding that the funds will mostly be used to expand BTI’s portfolio. He notes there are no expectations at the moment to grow the company’s head count.

However, despite the company’s strength, there’s still no initial public offering in the works. “We don’t have any near-term plans … we’ll just see where the markets are,” Mr. Waszak says.

BTI has about 150 local employees and about 220 in total, with regional offices in 15 markets including Boston, Belfast, Shanghai, London and Singapore.