Corel’s new CEO hasn’t wasted any time putting her stamp on the Ottawa-based software company.
The firm announced this week it has finalized the purchase of popular ad-blocking platform Ad Remover, its first deal under the leadership of California-based tech veteran Christa Quarles. Financial terms of the transaction were not disclosed.
Hired last September with a mandate to pursue growth through acquisitions, the new boss has delivered. On Tuesday, Quarles said the firm’s first deal under her watch will not be the last.
“This is not it, by any means,” she said in an interview with OBJ. “I think we have a strategic as well as an opportunistic M&A mindset. We go out looking in the marketplace for deals that we believe are strategic and complementary to our existing business. But then sometimes, we’re opportunistic as different assets come on to the market.”
The acquisition of Ad Remover, a six-year-old enterprise based in Austin, Tex., clearly falls into the former category.
Quarles said one of the things that made Ad Remover a particularly attractive asset was its low churn rate – that is, once customers sign on to the subscription service, they rarely leave. In addition, she feels it fits perfectly into Corel’s existing suite of so-called business utility products that include file archiving and compressing platform WinZip.
More recurring revenue
“It’s a small group of people that have frankly built a pretty phenomenal – both from a revenue and profit standpoint – business,” Quarles said of Ad Removal’s team of fewer than two dozen employees.
“One of the areas that became clear early on was we need to lean more into recurring revenue, recurring relationships, subscription businesses,” she added. “This is about developing an ongoing relationship with our customers. The customers love the product and stay with it year after year, and I think that’s an important feature.”
Corel seems far removed from the halcyon days of the 1990s, when the company occupied a prominent seat in the front row of Silicon Valley North’s upstart crop of software enterprises.
But Quarles is bullish on the firm’s future, saying Corel has seen “nice, robust growth” since she came on board last fall and she expects that trend to accelerate as the Ad Remover deal and other moves start to bear fruit.
Like a new coach bringing on trusted assistants who fit her style, Quarles has bolstered Corel’s C-suite by adding executives she’s worked with in the past.
'It always starts with people'
New chief revenue officer Andrea Johnston, who was hired in February, previously served in the same role at online restaurant-booking service OpenTable, where Quarles was chief executive from 2015-18. Fellow newcomer Connie Chen spent nearly seven years as general counsel at OpenTable before being named Corel’s chief legal officer in March.
“I think it always starts with people,” Quarles said. “I think as a CEO you recognize very quickly you cannot do it alone, and so you need to surround yourself with folks who care about the transformation.”
The deal is Corel’s first since former owners Vector Capital sold the Ottawa firm to U.S. private equity giant KKR in 2019 for a reported US$1 billion. It continues a recent trend for Corel, which hasn’t been afraid to pull the trigger on acquisitions it believes will broaden its market reach.
Corel’s products, such as CorelDRAW and WinZip, fall largely into the creativity and business utilities space, but in recent years the firm has looked to expand its portfolio. The company branched into product management with an acquisition in 2016 and hired software veteran Brad Jewett as chief financial officer the following year to lead its M&A strategy.
In late 2017, Corel acquired San Francisco-based ClearSlide, a software-as-a-service firm that develops sales support software. The following year, it acquired graphic design software maker Gravit Designer and Seattle-based Parallels, best-known for its software that allows Mac users to run Windows applications on their devices.