Almost a year to the day after his company was acquired by accounting powerhouse BDO Canada, Bill Syrros admits that what his entrepreneurial radar saw as a smooth path to growth turned out to be a lot bumpier than he anticipated.
“We literally signed our paperwork and went into a pandemic,” the CEO of Ottawa-based software firm Lixar says.
“What we didn't predict was some massive event like that which would cause us to, instead of accelerating our growth, (work) on a recovery strategy.”
One of the big data analytics firm’s most important customer verticals, the airline industry, shut down virtually overnight last spring in the wake of tough travel restrictions aimed at containing the spread of the novel coronavirus.
Suddenly, a sector that accounted for nearly 20 per cent of Lixar’s revenues was grounded. So too were the Ottawa firm’s lofty growth expectations.
"In the case of airlines, when their planes don't fly, they can’t pay bills."
“You can never imagine going through a pandemic-like condition where you can lose it all in six weeks,” Syrros says. “In the case of airlines, when their planes don't fly, they can’t pay bills.”
But the CEO says Lixar was able to quickly regain its bearings and get back on track thanks to its partnership with BDO.
The accounting giant’s broad network of customers in the government, financial services and energy sectors provided a lucrative source of new opportunities for the Ottawa firm.
On the strength of new contracts with heavy equipment manufacturer Toromont, B.C.-based mining company Trevali and publicly traded energy giant Brookfield Renewables, Lixar managed to get through 2020 without taking a major hit to its balance sheet or laying off any of its 200 employees.
“We latched on to some of the leadership in those industries and started taking our road show out to some of those new verticals … and started doing deals in verticals that we hadn’t had a huge footprint in before,” Syrros explains.
“I think all businesspeople had to go through this readjustment phase. Thankfully for us, it didn't mean something catastrophic.”
Founded more than two decades ago, Lixar has evolved into a leader in the AI space, providing big-data analytics, cloud and app development technology to dozens of big-name customers such as low-cost U.S. airline Allegiant Air, Bell Canada, BlackBerry QNX and NASCAR.
Before COVID hit, the firm – now rebranded as Lixar Fueled by BDO – had been growing its revenues up to 30 per cent a year. Now, BDO’s market muscle has helped push through a deal that Syrros believes will help Lixar regain altitude in 2021.
Last year, BDO’s M&A group targeted SimplicityBI, a data analytics firm with a growing customer base in the oil and gas, finance and health-care verticals. On Monday, BDO announced it had acquired the Calgary-based company in a deal that will see Simplicity’s 45 employees join the Lixar team.
Financial terms of the transaction were not disclosed.
“We always wanted a western base,” Syrros says. “If you want to work with western-based companies, you have to have a strong presence in Western Canada. They’re ready to really grow exponentially. It was a good fit.”
Federal government business
Lixar’s founder is feeling good about the year ahead, predicting the company will return to its pre-pandemic growth trajectory.
In addition to penetrating new markets like mining as well as oil and gas, Lixar is also slowly but surely extending its reach into the federal government with help from new hires such as Scott Bradley.
Bradley, who spent nearly eight years as senior vice-president of corporate affairs at Chinese telecom giant Huawei’s Canadian headquarters in Kanata, joined the company last fall as its leader of public-sector partnerships.
“The great thing about high tech is that it bounced back really quickly,” Syrros says. “We got lucky. (The pandemic) accelerated everybody's digital transformation agenda.”
As Lixar looks to emerge from a turbulent past 12 months, he hints that this week’s acquisition is only the beginning of a larger M&A-powered growth strategy.
“We’re going to continue to be aggressive,” Syrros says. “This certainly won’t be the last one.”