Ottawa-based cybersecurity firm Titus has quietly built itself into a force to be reckoned with.
Now, thanks to multimillion-dollar investment from a U.S. private equity giant, it’s ready to make some noise.
The 12-year-old company, which has previously been named to the Deloitte Technology Fast 50 list and received OBJ's Employees' Choice Awards, announced Thursday it has sold a majority stake in its operations to New York-based Blackstone Group LP. Terms of the deal were not disclosed, but the Globe and Mail – citing unnamed industry sources – pegged the value of Blackstone’s investment at about $100 million.
CEO Tim Upton and other senior managers at the company, which had been bootstrapped and wholly employee-owned up until now, will remain in place.
Mr. Upton told OBJ Thursday that explosive growth in demand for cybersecurity products meant the time was right to seek an outside infusion of fresh equity to help the 207-employee company “move fast and be a little bit more aggressive” in pursuing new customers.
“We know the opportunity is now.”
“We know the opportunity is now,” he said. “We want to make sure that we are able to execute and take advantage of this opportunity.”
In a statement, Blackstone said Titus’s solutions have the potential to change the industry.
“We are excited to combine Blackstone’s flexible capital and experience with Titus’s market-leading solutions to continue to transform data-centric security,” said Viral Patel, managing director at Blackstone Tactical Opportunities. “With data breaches at an all-time high, each day brings another example of the importance of protecting information.”
Founded in 2005, Titus makes software that allows users to flag emails and attachments according to their level of security, such as secret and classified. It also alerts users before they send sensitive emails to recipients who aren’t on internal corporate mailing lists.
Calling it “spellcheck” for corporate security policies, Mr. Upton says the software lets employees “be accountable” for ensuring protecting sensitive data. Titus has more than 950 customers – including the North Atlantic Treaty Organization, the Canadian government, militaries in G7 countries and Australia and Fortune 2000 companies such as Dow Corning – and its revenues are growing by up to 40 per cent a year.
Mr. Upton said he sees a particularly fertile market across the Atlantic, where next May the European Union is set to impose harsh new penalties – including major fines – on firms that don’t properly safeguard against consumer data breaches. Titus has boosted its European sales team from about five to 20 in the past year, 16 of whom are based in the United Kingdom.
“The problem has not been solved in a long time, and now there’s real financial impact that could come from a breach and everyone’s taking notice,” he said.
The CEO said he also expects growth to continue at a steady clip in the United States and Canada, with the financial and health-care sectors being key sales drivers. Titus’s new, more aggressive strategy could include acquisitions, which are suddenly much more feasible with Blackstone’s financial muscle behind it.
“It certainly sets us up for that for sure,” Mr. Upton said. “Now we have choices.”