Ottawa-based Advanced Software Concepts has been flying under the radar for most of its 23 years, but CEO Shawn King says that is about to change now that his company has been acquired by e-commerce solutions provider Mediagrif in a deal worth $18.5 million.
“Figure it out, get it down, then roll it out. That’s the stage where we’re at now,” he said.
ASC was originally spun out from Bell Canada in 1993. The software-as-a-service-based contract, document and forms management solution provider spent its early years locking down customers to long-term deals, Mr. King said, adding most of its business has come from customer referrals.
Mr. King said those long-term contracts and rapid growth made the company attractive to potential investors.
“Some of our customers must have spoken with other VCs because it has just been a constant weekly thing that we were always being pursued,” he said.
Revenue for ASC’s last fiscal year ended March 31 was up 36 per cent year-over-year to $5.2 million. Since then, the company has signed deals that would represent another 20 per cent increase and is on target to have revenues of $7.2 million this fiscal year.
The company has grown from an original staff of Mr. King and four others to a headcount of 38 at its office in the Kanata South Business Park.
“We are just bursting in our seams,” said Mr. King, a former software developer at Mitel. “We don’t have any space for anyone. We’re definitely having some growing challenges.”
He said he considered many growth management options and had talks with people in the industry such as former Halogen CEO Paul Loucks.
Mediagrif approached ASC in the fall. The Longueuil-based company was originally interested in integrating ASC’s technology into its MERX procurement web platform.
“They were fairly aggressive,” Mr. King said. “We engaged in October. We were talking partnership in the first week of November. The second week of November they were talking acquisition.”
Mr. King said he initially pushed back at that suggestion, but by January he was starting to change his mind.
“I went down to visit them to make sure there was a cultural fit, and there were a lot of synergies.”
Having the “deeper pockets” of Mediagrif on board will help ASC retain and attract talent, said Mr. King, and will allow it to pursue bigger contracts it might not have been able to handle previously.
“We’ve got a very profitable business and long-term contracts with major accounts and now we’re trying to turn it up a notch,” he said.
Mr. King said ASC is in hiring mode, adding he is exploring options for increased office space. He owns the building the company is now located in, so expanding there could be a solution. MERX has space on Antares Drive and he said there are other possibilities within the Kanata South Business Park.
Although its technology will be embedded into MERX, ASC will continue to run as a standalone company with Mr. King at the helm. While he isn’t planning on leaving his job any time soon, Mr. King said he does have to prove himself and expects to have about a year and a half to do that.
“Eighteen months from now, we’ll be crossing a different bridge with higher expectations all around.”