Canadian Firm 20-20 Technologies Acquired by Vector Capital Corp. for $77 Million

By: Kuljit Grewal  |   August 1st, 2012   |   Business, News, O Canada

Montreal based 20-20 Technologies Inc. has been acquired by San Francisco private equity firm Vector Capital Corp. The acquisition is valued at $4 per share or $77 million overall. The company specializes in world class software for computer-aided interior design and furniture manufacturing. The overall acquisition amount represents a 28% premium on 20-20’s closing share price on April 3, 2012 – the final trading day prior to Vector’s strategic review period.

 

Founded in 1987, the company began as a cabinetry manufacturer that eventually realized its true calling as the creators of interactive systems for 3D animation as it pertains to interior and furniture design. 20-20 employs over 500 people with operations in 11 countries worldwide.

 

According to the Globe and Mail, 20-20 contacted 50 potential strategic and financial buyers, never losing sight of the main goal, which was the maximization of shareholder value. According to 20’s CEO Jean-François Grou, Vector was the choice due to overall fit regarding the expansion of international business.

 

Vector is one of many U.S. and international firms that have acquired Canadian tech companies in the past. They had dabbled in 2003, investing in then troubled software maker Corel. That company was wound down, with non-core businesses sold and R&D being cut.

 

Many feel that Canada’s lack of a solid PE and VC culture and foundation is leading to a great deal of lost potential. According to the same Globe article, high tech companies now represent a meager 1.6 per cent of the TSX composite index. This is staggering in comparison to the 41 per cent tech companies represented in July 2000, prior to the dotcom bubble’s burst. There could definitely be some truth to those sentiments.