Aviation software maker Mxi Technologies announced Tuesday it is being acquired by Swedish enterprise software firm IFS, calling the deal a springboard for growth that will allow the Kanata-based company to expand its global presence.
Mxi chief operating officer Scott Helmer said combining forces with the multinational software giant made sense for the local firm, which celebrated its 20th anniversary just two months ago.
Mxi’s products are used to maintain everything from engines to in-flight entertainment systems on more than 20 per cent of the world’s commercial and defence aircraft fleets. Its customers include Southwest Airlines, Air France, Qantas and the Swedish air force.
IFS, meanwhile, has a presence in more than 50 countries and is among the world leaders in resource planning and asset management software in the aerospace and defence space.
Aviation customers are increasingly looking for a “single strategic vendor” to provide a full suite of enterprise and maintenance services, Mr. Helmer said. The two companies, which already share many clients, began discussing a potential deal about a year ago after IFS was bought by Stockholm-based private equity firm EQT Partners.
“The dialogue with IFS clearly illustrated a strong complementary strategic fit between the companies,” Mr. Helmer said.
The deal is expected to close during the first quarter of 2017. Terms of the agreement were not disclosed.
Under the deal, Mxi’s 265 employees will become part of IFS’s new aviation and defence division, although the Mxi name will be retained in some of the business unit’s branding. Mxi headquarters on Terence Matthews Crescent, which is home to about 245 employees, will remain the division’s North American base.
There will be a shakeup at the top, however. Mxi announced that CEO Jon Slangerup, a veteran aviation executive who replaced former company boss Bill Cavitt in September, has decided to leave the firm.
Other top-level Mxi executives will stay on, with Mr. Helmer assuming the role of senior vice-president of IFS’s new aviation and defence business unit.
Mr. Helmer said he doesn’t expect any “significant changes” at the Kanata office, which will continue to be the research and development hub for Mxi’s popular Maintenix software suite.
“We expect to continue to grow here in Ottawa as well as on a global basis,” he said. “We like it here.”
Fredrik vom Hofe, IFS’ senior vice-president of business development, told reporters on a conference call the company wants to expand its customer base in North America and sees the acquisition of Mxi as a key part of its bid to raise its profile in the aviation and defence sector.
He said the deal will allow IFS, which was founded in 1983 and now has 2,800 employees and annual revenues of 3.4 billion Swedish krona (about C$500 million), to add to its stable of products and boost its R&D expertise.
“We have been very impressed by their performance,” he said of Mxi’s employees.
Founded in Gloucester in 1996, Mxi has grown into one of the National Capital Region’s largest software companies. The original owners sold the firm to New York-based Moelis Capital Partners in 2012.
In a 2015 interview, Mr. Helmer told OBJ the company generated annual revenues “well north of eight figures.” Earlier this year, Mxi opened a new U.S. headquarters in Irving, Texas, citing growing demand for its Maintenix software from U.S. civil and defence aviation clients.