Pulled back from the brink of bankruptcy, Kanata-based telecom firm Magor has been acquired by Harris Computer Systems in a deal worth $2.75 million.
For months now, the fate of Magor Corp. has been uncertain. Last September, the video software provider announced it would undergo a strategic review to consider options to turnaround the ailing company. In the year leading up to that point, the company had posted regular losses and suffered declining revenues, subsisting largely on funding from local tech icon and Magor chairman Terry Matthews and his companies.
Then-CEO Mike Pascoe left the company the month before, though a release stated he would remain on as a financial advisor to the firm. Mr. Pascoe has since joined Stratford Managers. Chief financial officer Brian Baker, who replaced Mr. Pascoe as interim president and CEO, did not return request for comment on the acquisition.
In November, the company filed for bankruptcy protection and delisting from the TSX Venture Exchange. Magor’s shares halted trading on Nov. 21, and the company provided no further update for the next six months.
Founded in 2007, Magor went public in 2013 with aims to make videoconferencing as easy as bumping into a colleague and striking up a casual conversation. Named one of OBJ’s Startups to Watch in 2011, the company primarily targeted government and health-care clients with a bet that the videoconferencing market would shift from hardware-centric towards software-based solutions.
Sampford Advisors, an Ottawa-based consultancy specializing in mergers and acquisitions, assisted Magor with its strategic review. CEO Ed Bryant tells OBJ that Sampford contacted 95 prospective parties that may have been interested in acquiring the company and taking on its substantial debt. According to its last public filings, Magor’s long-term debt stood at $3.6 million as of July 31, 2016.
This past week, courts approved Harris Computer Systems’ acquisition of the firm. Harris, itself a subsidiary of Constellation Software Inc., said it does not comment on acquisitions. CSI did not return request for comment.
The acquisition price will go towards paying off creditors across multiple holdback periods, with the highest percentage investors being paid off first.