2023 has been a bit of a “bumpy” ride, but Intouch Insight CEO Cameron Watt sees better days ahead – thanks to a new acquisition that gives Intouch a bigger foothold in the U.S.
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While he readily admits that 2023 has been a bit of a “bumpy” ride for his firm, Intouch Insight CEO Cameron Watt sees better days ahead – thanks in large part to a new acquisition that gives Intouch a bigger foothold in the United States.
The Ottawa company, which specializes in customer survey and data collection software for major retailers and other blue-chip clients, finalized a deal earlier this month to acquire Ohio-based Alta360 Research and its sister firm, Ardent Retail Services.
Founded in 1974, Alta360 specializes in platforms and products that help major retailers, restaurant chains, gas stations, supermarkets and other Fortune 200 clients gather feedback from consumers and intelligence on competitors’ pricing and services.
Meanwhile, Ardent Retail Services is a new venture that provides signage, maintenance services, inventory management and other offerings to big-box chains in the U.S.
Well-entrenched in the mystery shopping space, Alta360 generated revenues of US$5 million last year.
Ardent, on the other hand, is just getting off the ground. The upstart firm works with retailers to improve the way they market themselves and sell their products, including remodelling stores, redesigning signage and providing better inventory-tracking tools.
Watt believes Ardent is poised to quickly gain altitude, thanks to a growing customer list that includes two of the largest convenience store chains in North America.
Intouch has dabbled in rebranding services in the past, but the acquisition of Ardent gives the firm “a much broader reach in that area,” Watt explains.
“The plumbing is all in place, so to speak,” he says. “I see huge opportunities. The merchandising market and the markets for these types of things are probably bigger than that of mystery shopping in terms of total market size.”
The two companies come with a total price tag of about US$3.1 million, which isn’t exactly pocket change for a micro-cap like Intouch.
The 100-employee company, which trades on the TSX Venture Exchange, currently has a market capitalization of $9.25 million in Canadian funds. But Intouch isn’t afraid to spend money when a business with upside catches its eye, as its $3.7-million acquisition of Georgia-based mystery-shopping provider SeeLevel HX two years ago demonstrated.
“The way I put it is that we are an opportunistic acquirer,” Watt says. “When good companies come along that make sense to us and our shareholders, we’re absolutely all in.”
The CEO clearly likes what he sees in Intouch’s latest buys. In addition to giving the firm a bigger footprint in the U.S. and broadening its service offerings, the deal has also added depth to the company’s leadership team – Stanley Hart, who founded and served as CEO of both Alta360 and Ardent, has joined Intouch and will focus on growing the firm’s revenues.
“I’ve known Stan for a long, long time,” Watt says. “He brings a wealth of experience. This (deal) is absolutely going to be one of our big levers to pull to get that growth moving forward.”
The acquisition is a highlight in what’s been a bit of a down year for Intouch, whose 2023 revenues haven’t quite matched its sales from a year earlier – figures that were, as Watt points out, somewhat skewed by a one-term services contract that was not renewed.
Like many tech firms, Intouch has taken a few body blows in the investment market over the past year and a half. After reaching as high as 80 cents in the spring of 2022, the firm’s stock had fallen to 36 cents as of Friday afternoon.
But Watt remains confident the company is ready to turn the corner as 2023 winds down.
“The market itself has become much more bearish over the last 18 months, and we certainly have not been immune to that, despite the fact that we are profitable,” he says.
“Obviously, we’ve been facing the same economic headwinds all year that everybody’s been facing. We’ve managed to hold our own. We’re starting to see that light at the end of the tunnel get a little brighter. We expect that we’ll have growth by the end of the year.”
