After acquiring a Swiss-based company in a bid to broaden its product offerings, Kanata software maker Martello Technologies has landed a $5-million loan from its high-profile co-chairs to help finance the transaction.
Martello (TSX-V:MTLO), which makes products that help customers detect and troubleshoot problems in their high-speed communications networks, said earlier this week it’s agreed to acquire Geneva-based GSX Participations in a cash-and-share deal worth $18.7 million.
Martello now says co-chair Terry Matthews’ investment firm, Wesley Clover International, and former CEO and current co-chair Bruce Linton have agreed to loan the company $5 million to meet the capital requirements of the deal.
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“Recent events, including the shift to remote work, have only served to underscore Martello’s opportunity in delivering a reliable user experience for the cloud-based services that businesses rely on every day,” Matthews said in a statement. “I’m pleased to support Martello’s strategy and look forward to the company’s continued growth.”
Vistara Capital and National Bank are also helping to finance the deal, which is expected to close at the end of May.
Martello says the acquisition will give it access to new customers. While the company has already grown its monthly recurring revenues to more than $1 million on the strength of its Mitel sales channel, GSX offers similar services to users of Microsoft’s 365 suite of products such as Outlook, SharePoint and Microsoft Teams and has more than 400 customers around the world.
“That is such a huge market for us to go at,” CEO John Proctor told OBJ on Tuesday.
Martello’s share price was down 15 per cent to 25 cents in late afternoon trading on the TSX Venture Exchange.