By KRYSTLE CHOW
Published in the Ottawa Business Journal newspaper.
Feb. 4, 2008

The value of venture capital investment in Ottawa fell by 31 per cent year-over-year in 2007, despite a pick-up in activity during the fourth quarter, according to a new report by the Ottawa Centre for Research and Innovation.

Disclosed venture capital investments in Ottawa-based businesses totalled $184.5 million for all of last year, down from the $266.1 million seen in 2006. The number of deals also fell to 14 from 19.

However, the fourth quarter of 2007 saw somewhat of a revival of VC investment compared to more sluggish activity earlier in the year, with five local deals worth a total of $84.4 million. Although the dollar figure was 2.3 per cent lower than the same quarter a year earlier, the fourth quarter of 2007 was the largest of the year and more than triple the $23.2-million investment seen in the third quarter.

“There was nothing new in 2007; it’s been Continue reading →

By KRYSTLE CHOW
Published in the Ottawa Business Journal newspaper and website.
Jan. 28, 2008 (Jan. 30 on OttawaBusinessJournal.com)

When wireless, satellite and defence solutions maker EMS Technologies Inc. said it was going to buy satellite communications company DSpace and merge it with its Ottawa-based SATCOM operations, it seemed like the perfect fit.

Both make satellite technology to provide mobile broadband Internet to people on the move in remote areas, both used U.K.-based Inmarsat’s satellites, and the acquisition wouldn’t require SATCOM to shed any product lines or lay off staff.

But DSpace is based in Adelaide, Australia, which is more than a day away by plane and 12-and-a-half hours ahead of Ottawa. So, how did SATCOM deal with the distance and the differences, both temporal and cultural?

The OBJ spoke with SATCOM general manager Gary Hebb about some of the ways the companies managed to bridge this divide.

OBJ: Why did you pick DSpace to acquire?

HEBB: Our satellite communications technology, which are particular terminals that give you high-speed data communications while you’re moving in a vehicle anyplace around the world, is pretty complicated tech, with only about five companies in the world that provide that kind of technology. DSpace was one of them and EMS was one of them.

With DSpace in Australia, they have customers like the Australian defence forces and they have access to markets in that side of the world that we normally wouldn’t even think of. It gives us access to those customers, those markets and more of an understanding of what’s going on in different areas of the world.

It also gives us access to Australian government funding. Satellite communications is a very high-tech kind of business and it’s the sort of thing that qualifies for research and development initiatives that different governments have, and Continue reading →

By KRYSTLE CHOW
Published in the Ottawa Business Journal newspaper and website.
Jan. 7, 2008

Click here to view this article on OttawaBusinessJournal.com.

It doesn’t look like 2008 will be a breakthrough year for Ottawa’s high-tech companies, but the good news is that a downturn isn’t expected either, despite the U.S. economic slowdown, low funding levels and last year’s historic merger and acquisition activity.

With some of the biggest deals in Ottawa history seen in 2007, the forecast is that the momentum from those mergers and acquisitions is going to help activity levels in this area stay healthy, with only a slight dip expected this year.

Robert Ford, a technology lawyer with Gowlings Kanata, says there were several factors driving M&A activity in 2007: low-cost debt funding and private equity; strong equity prices, meaning that it was a good time to buy because company shares were worth a lot; international pressure and consolidation, and lack of venture capital.

“Three of those factors will drop this year – the low-cost funding, equity prices will fall a little bit with the U.S. slowdown, and private equity will fall off somewhat in response to exposure to asset-backed commercial paper,” Mr. Ford says. “However, there is still a lot of international sales pressure, which will drive some M&A and strategic buys, and the lack of venture capital means some companies will have to sell before their time in Ottawa, but it won’t be as furious.”

Mr. Ford says the pressure to consolidate in order to compete internationally is going to mean a lot
more mergers and purchases of smaller Ottawa companies, as in the IBM-Watchfire and Allen-Vanguard/Med-Eng deals.

However, there will be fewer mega-deals than in 2007 as the industry is still “digesting the large deals” of last year, says Cliff Taylor of PricewaterhouseCoopers, agreeing with Mr. Ford that there will be many strategic buys of Ottawa companies.

“There will be an increase in foreign deals in North America (in general), with foreign companies snapping up strategic technology to round out their own technology portfolios and to get their products to market faster than they can on their own,” Mr. Taylor says.

“As well, a lot of companies funded over the past five years now need an exit … a few go public, but usually they eventually get purchased because it’s the path of least resistance.”  Continue reading →

By KRYSTLE CHOW
Published in the Ottawa Business Journal newspaper and website.
Dec. 31, 2007 (Jan. 2, 2008 on OttawaBusinessJournal.com)

Click here to view this article on OttawaBusinessJournal.com.

While there’s an oft-stated fear that venture capital is dwindling in Ottawa and across the province, it seemed this year that local companies were able to find plenty of financing alternatives if they looked hard enough.

Ottawa companies have raised more than $1 billion through investment other than venture capital deals (see sidebar) this year alone, whether through private placements, venture debt deals, public offerings or grants, and it looks like this could become a bigger trend with lower levels of venture capital and as the startups that survived the tech crash mature.

One financing method that popped up in several local transactions this year was the venture debt deal, along with other types of loans. These venture debt financing rounds are much easier and cheaper to work with than equity financing rounds and help young companies avoid equity dilution, while giving them more time to raise other kinds of capital.

“As companies are getting a bit Continue reading →

By KRYSTLE CHOW
Published in the Ottawa Business Journal newspaper and website.
Dec. 14, 2007 (Dec. 17 in the print edition)

Click here to view this article on OttawaBusinessJournal.com.

Bridgewater Systems may have had to lower targets for its initial public offering, but CEO Ed Ogonek says the company’s successful closing of the IPO was a feat in itself in these challenging times.

The Ottawa-based company, which makes software to manage voice-over-Internet-protocol subscriber traffic, debuted on the Toronto Stock Exchange this morning after having raised $35 million in its IPO through the sale of 6.36 million shares at $5.50 each.

The stock finished its first trading day down about 5.5 per cent, or 30 cents, to $5.10.

Of the IPO amount, $20 million came from a treasury offering and $15 million from the sale of shares by existing shareholders.

“This is an opportunity to now accelerate our growth plan going forward, with investment into global infrastructure to extend our sales and marketing reach, our solution capabilities with a broader product portfolio, and extend our high-value professional services capabilities,” Mr. Ogonek said in an interview with the OBJ.

Mr. Ogonek confirmed that the amount raised in the IPO was lower than the company had initially hoped for, with a Dow Jones report late last week saying Continue reading →

By KRYSTLE CHOW
Published in the Ottawa Business Journal newspaper and website.
Dec. 10, 2007 (Dec. 12 on OttawaBusinessJournal.com)

Click here to view this article on OttawaBusinessJournal.com.

Picture this: you’re walking down the street when your cellphone beeps. It’s a message alerting you that tickets to that sought-after hockey game are now available. You go online, purchase the tickets instantly without waiting in line and voila! You’re on your way.

That immediate jump to action is what marketing departments are hoping for with this pervasive and interactive new method of reaching out to customers, especially with the tech-savvy 18-to-24 age group.

Forget e-mail marketing if you’re looking to court today’s generation, says Isabelle Perrault, director of marketing for the Ottawa Senators – the way of the future lies with mobile marketing.

“Print or TV are pretty static media, but as soon as you add mobile, it’s very interactive. It engages people, it’s relatively easy, and it’s immediate,” Ms. Perrault says.

The Ottawa Senators started using wireless marketing before the 2006-07 NHL playoffs, first registering a vanity short code to which wireless users would send a text message in order to opt into the Senators’ database.

After the playoffs, Ms. Perrault says, the hockey team’s wireless service got 800 subscribers simply from Continue reading →

By KRYSTLE CHOW
Published in the Ottawa Business Journal newspaper and website.
Nov. 5, 2007 (Nov. 7 on OttawaBusinessJournal.com)

Click here to view this article on OttawaBusinessJournal.com.

Software firm’s move to Ottawa brings it closer to big players and customers

With its situational awareness products already in use by navies around the world, analysts say OSI Geospatial Inc. is clearly the market leader in its space.

Chief executive Ken Kirkpatrick says OSI’s main product, the proprietary Electronic Chart Precise Integrated Navigation System (ECPINS), already has 60 per cent of a $100-million market, which is growing at 10 per cent annually. And that’s with 80 per cent of the world’s navies yet to convert from paper-based to electronic charting.

“Five years ago, we identified the warship navigation sector as the sector to go after and become market leader in, and we controlled the intellectual property to support our leadership position … we’ve been very successful in the naval navigation market and are the hands-down leader in that space,” says Mr. Kirkpatrick.

“A lot of what we do is in emerging markets, we’re changing how people do their job since the majority of warships navigate from paper charts and (are only beginning to) move to very sophisticated electronic systems. The good news is that the rest of the world has accepted the technology and the benefits it presents, so it’s a matter of when, not if.”

The company’s ECPINS product is an all-in-one navigation system which integrates various sensors on the bridge of a ship, including the global positioning system (GPS), radar and depth sensors, and provides the information in a single picture to allow ship commanders to know where the craft is and what its surroundings are like.

Mr. Kirkpatrick says this technology is in use by eight navies worldwide and has been standardized by the Canadian and U.K. navies. Many of the company’s military customers even require other major technology vendors – some of whom are OSI’s competitors – to integrate OSI’s product into their offerings. Continue reading →