Ottawa-based WiLAN adds another acquisition in midst of disappointing Q1

Shaun McEwan
WiLAN interim CEO Shaun McEwan.

Hoping to soften the blow of a slow first quarter, Ottawa-based WiLAN (TSX:WIN)(NASDAQ:WILN) announced another acquisition this week, one that moves the patent licensing firm further into the Industrial Internet of Things field.

WiLAN’s revenues were $7.6 million for the quarter ending March 31, 2017, a significant drop from $30.2 million a year ago. This translated to a net loss of $7.2 million, as compared with a profit of $4.9 million in 2016. (All figures in U.S. dollars.)

In a release, interim CEO Shaun McEwan was quick to attribute the soft quarter to “lumpiness,” the variability in WiLAN’s business model resulting from the unpredictability of licence signings from quarter to quarter.

The firm also announced the acquisition of Viziya, a software and services provider that helps companies to optimize asset performance. The Hamilton-based company counts Fortune 1000 firms among its clientele.

Its products are focused on controlling costs, hitting production targets and compliance with safety standards – all aspects of the so-called “Industrial Internet of Things” (IIoT), where WiLAN sees a market potential worth trillions of dollars.

WiLAN is set to purchase all outstanding shares of Vizaya in a deal worth $40.5 million (Cdn). The transaction is subject to various approvals on the Toronto Stock Exchange.

This acquisition follows an announcement last month that WiLAN would purchase International Road Dynamics for $63.5 million (Cdn), another firm in the IIoT sector.

"WiLAN..., is focused on growth by identifying, acquiring and supporting IIoT companies with strong management teams, attractive financial fundamentals and promising growth potential; Viziya meets all these criteria," said Mr. McEwan in a statement.

"This is the second acquisition that follows our new growth plan and we believe that investing our capital in these promising technology businesses will drive the greatest shareholder returns over time."

Shares of WiLAN reacted poorly to Thursday’s news, dropping $0.50, or roughly 18 per cent, in midday trading on the TSX.

This marks the final time WiLAN reports quarterly earnings. The firm is renaming itself Quarterhill in June.