Coming off a record sales year in 2019, Peter Strom and his executive team at March Networks took a rather unconventional step in their quest to push the Kanata-based firm to even loftier heights: they decided to seek new owners.
As counterintuitive as that move might seem, there was a method in March’s madness.
Though demand for its video-surveillance software was rising and the company was making steady inroads into new customer verticals, Strom sensed there were storm clouds on the horizon.
OBJ360 (Sponsored)
Giving Guide: The Council on Aging of Ottawa
What we do Since 1975, The Council on Aging of Ottawa (COA) has worked tirelessly to advance the wellbeing of Ottawa’s older adults. Older adults are valued assets in our
Giving Guide: The Ottawa Mission
What we do The Ottawa Mission is our city’s oldest and largest emergency shelter. Since 1906, we have been at the forefront of caring for people who are homeless and
March – which sells its software to more than 600 financial institutions around the world as well as 2,000-plus retailers – was getting pushback from customers who were uneasy about a Chinese private equity firm’s growing stake in March’s New Jersey-based parent company, Infinova.
With tensions between then-U.S. president Donald Trump’s administration and China rising, the Kanata firm found itself caught in the crossfire.
“The perception in the industry was that March was now controlled by a Chinese entity,” explains Strom, noting that a number of influential clients hinted it might be time for the company to shop for new owners.
New customer streams
March began courting potential suitors in February 2020, just as the COVID-19 crisis was dawning. Twenty months later, it announced in October it had reached an agreement with Taiwan-based manufacturer Delta Electronics to acquire March for US$114 million, a deal that closed last week.
While finding a buyer took longer than originally expected due to the pandemic, Strom believes it was worth the wait.
The longtime CEO says Delta – a publicly traded company that makes a variety of electronic components from computer fans to electric vehicle chargers and has annual revenues of more than $10 billion – does business with a ready-made pipeline of potential March customers that includes some of the world’s largest banks and retailers.
In addition, the Taiwanese firm follows an aggressive M&A playbook, offering March a path to growth through acquisitions that never materialized under its previous owners.
“We think with (Delta), what we can go out and look at in terms of acquisitions is significantly larger than maybe it would have been under Infinova.”
“We think with them, what we can go out and look at in terms of acquisitions is significantly larger than maybe it would have been under Infinova,” says Strom.
Now at more than 300 employees around the world, including 190 in Ottawa, March boasts a customer roster that includes Walmart, U.S. quick-service food giant Dunkin’ Brands and four of Canada’s five biggest banks.
The company, which was founded in 2000 to provide video surveillance, now uses big-data analytics technology to help customers extract deeper insights from those surveillance systems, such as monitoring in-store customer flow and detecting potential fraud.
Last year, March unveiled new software that tracks traffic in and out of a designated area and sends alerts when the space exceeds COVID-related capacity limits. Today, the company’s facial-recognition software uses algorithms to determine shoppers’ genders and ages in a bid to help retailers get a better handle on who their customers are and when specific cohorts such as seniors do most of their buying.
Meanwhile, the company has expanded into the burgeoning cannabis market, launching a solution to help pot producers track the growth and sale of their plants. The groundbreaking technology earned March a 2019 Best Ottawa Business Award, and the firm is now selling the platform to more than 100 cannabis producers.
‘Bullish’ on 2022
While Strom will now answer to new bosses, he says it will be business as usual for him and his Kanata-based executive group, who will remain in their current roles.
Ottawa’s 2005 CEO of the Year says he still has plenty of work to do as March rebounds from a “significant slowdown” in 2020, when its revenues fell nearly 20 per cent from their pre-pandemic total of more than $100 million amid the pandemic-fuelled global economic slump.
March expects to recover about half of those lost sales in 2021, and Strom is already predicting a banner year ahead.
Buoyed by Delta’s hefty financial backing and expansive global reach, his company is eyeing an aggressive campaign to grab more market share in the hospitality sector while building on its traditional bases in industries such as banking and retail.
“We’re bullish on 2022,” Strom says.
