Corel finalizes acquisition of Belgian software firm as CEO predicts a 'more attractive market' for M&A

Christa Quarles
Corel CEO Christa Quarles says it's a buyer's market for acquisition-minded tech firms. File photo

Christa Quarles’ grand design for Corel is taking shape.

When Quarles was hired as CEO of the Ottawa company best known for its CorelDRAW graphic design products nearly two years ago, she was taking over a business she believed had all the components of a world-beating software enterprise but didn’t quite know what to do with them.

Simply put, Quarles felt that Corel was suffering from a bit of an identity crisis. The California-based tech veteran set out to change that.

Quarles assumed the top job at Corel at the height of the pandemic, when the shift to remote work was in full swing. Surveying Corel’s diverse product stack, she saw a mix that included product management software like MindManager and Corel’s Parallels suite of products, which allow Mac users to run Windows applications on their devices.

She soon realized a common theme united all those platforms.

“We’ve bought a bunch of companies over the years and one of the jobs that I have is really understanding how these pieces come together in a unified corporate vision,” Quarles explains.

“When I joined, it felt like a very disparate set of assets. It didn’t feel that there was a cohesive understanding of how these things could come together. I think what is super clear to us now is, we stand for the future of work.” 

By that, Quarles means Corel makes software that aims to help employees work smarter and more efficiently, whether they’re at home using a desktop that runs on Windows, or at a coffee shop tapping out emails and carrying out tasks on their iPhone.

“We enable you to work wherever and however you want to work,” she says.

“What we’re seeing more and more is that in the pandemic, people are bringing their phone, they're bringing their desktop, they’re in a coffee shop, they might be in the office, they might be on a couch. We want to enable people to work wherever and however and whenever they would like to work in a very secure way.”

Corel has just taken another step toward expanding that vision. The firm announced this week it has acquired Awingu, a European company whose signature platform allows users to securely stream a range of applications on their computer or smartphone browsers without having to download software. 

Awingu’s product is designed to help stop customers from inadvertently introducing viruses and the like to their devices. In many cases, the platform also eliminates the need for users to log on to virtual private networks, meaning customers can sidestep “friction-filled security processes” that waste time and are often clumsy to navigate, Quarles adds.

“Here, it’s just like you get on a browser, you get it, you go and you do,” she says.

The transaction is Corel’s first under new vice-president of corporate development Charles Breed, who was brought on board last November to spearhead the company’s acquisitions strategy. 

Quarles has given Breed, who previously oversaw M&A activity for Texas-based identity management software firm SailPoint Technologies, the green light to kick the tires on any potential buys that “fit within the wheelhouse” of Corel’s mission to help streamline the future of work.

Buyer's market

Quarles believes acquisition-minded firms like Corel are heading into a buyer’s market as many tech industry experts predict a looming prolonged downturn that could see waves of layoffs and slower growth projections for companies that thrived earlier in the pandemic.

“We’ve seen quite a shift in public market multiples and valuations,” she says. “I think people are getting very clear-eyed with what are strong unit economics and what is real value to an end customer and how we deliver that value in an effective way. I think the market’s going to continue to get more attractive for M&A.”

While Corel wouldn’t divulge the financial terms of the deal, Quarles says it was larger than the firm’s first M&A transaction under her watch, last year’s acquisition of ad-blocking platform Ad Remover

Corel would not provide an exact headcount for Awingu, which is headquartered in Ghent, Belgium and has an office in New York. According to LinkedIn, the firm has 35 employees, and Quarles says she expects its staff count will rise as demand for secure access to technology accelerates in the new work-from-anywhere world.

“The intention is to not just keep everybody, but to invest,” she says.

Big-data guru joins C-suite

Meanwhile, Quarles is also trying to figure out how to create a more seamless user experience for customers who manoeuvre between various Corel products like DRAW, graphic design tool Gravit and painting software platform Painter.

Chief data officer Grant Parsamyan, who previously headed up OpenTable’s analytics department, joined Corel in March to lead its drive to get a better handle on how the company’s software is used and how products can be better integrated with each other.

“Data is the new oil, as they say,” Quarles says. “This is really about, how do we deliver a great product experience at the end of the day? There’s always room for improvement across the board.”

Corel – which was acquired by American private equity giant KKR from Vector Capital for a reported US$1 billion in 2019 – has evolved from a company that once made most of its money from up-front licensing fees to a software-as-a-service organization that now generates the bulk of its revenues from monthly recurring subscription fees.

Quarles says the pendulum will continue to swing further in that direction with the acquisition of Awingu.

“We’ve made a ton of progress and we’re going to continue to make progress there,” she says.