An Ottawa tech firm that helps colleges and universities around the world deliver discounted software to students has been sold to a Calgary-led group of investors.
Kivuto Solutions, a privately owned company based in the ByWard Market, has been acquired by Calgary’s Legado Capital and a group of backers led by Toronto’s Roynat Equity Partners. Terms of the deal, which closed in late February, were not released.
Legado co-founder and managing partner Jeff Blacklock said he and business partner Carlos Meza have been targeting Canadian tech companies for acquisition since they launched their fund about 18 months ago. They first came across Kivuto last summer and began formal talks with the company in September.
“It really kind of fit with who we were, which last made it a lot easier choice to become formally involved with them,” Blacklock told OBJ from Calgary on Tuesday.
A privately owned company with about 100 employees, Kivuto makes a turnkey platform that delivers software, subscription cloud services and digital textbooks to businesses and educational institutions in more than 180 countries.
Founded in 1997 in Halifax under the name PowerKnowledge, the company relocated to Ottawa two years later and changed its name to e-academy. In 2012, the firm rebranded to Kivuto and moved from Wellington Street to its current office at 126 York St.
Blacklock said Kivuto’s focus on the education sector meshes well with Legado’s own mission. The Calgary company is a search fund backed by a group of U.S. and Canadian investors that targets companies in the health care, testing and certification and technological services spaces.
In a Financial Post article last year, Legado said its potential targets are companies that have an enterprise value between $10 million and $30 million, generate EBITDA in the $2-million to $6-million range, have stable cash flow and are scalable.
“Kivuto checked off a lot of what we were looking for,” Blacklock told OBJ. “There are lots of avenues for growth; they’re a great company with a great niche play. Just the whole purpose for their existence really kind of spoke to us.”
Both partners are joining Kivuto’s executive team effective immediately, with Blacklock becoming president and chief operating officer and Meza moving into the CEO’s role.
Current president Rick White will remain with the company as an adviser, while Kivuto founder and former chief executive Ram Raju will also stay on as an adviser and member of the board.
Blacklock, who plans to relocate to Ottawa with his family next month, said he sees a bright future for the firm, which has shown “consistent” revenue growth of about 10 per cent a year.
“We’re hoping to expand,” he added. “We’re staying in Ottawa and excited to be part of the city. We think a lot of the strength of this company comes from being in Ottawa.”