Taking stock: N-able’s long and winding road to an IPO

N-able employees
N-able employees

More than two decades after it was launched, Kanata software firm N-able has finally achieved the milestone its founders set for it by going public on the New York Stock Exchange.

The maker of secure IT management tools officially began trading on the NYSE last week at a price of just over US$15 a share, giving it a market capitalization of more than US$2 billion. For group vice-president Mike Cullen, who joined the firm in 2001 one year after it was founded, seeing the “NABL” symbol scroll across the ticker was a dream come true.

“It’s incredibly exciting,” he told Techopia on Wednesday. “Twenty years ago, that was the goal of the company. There’s a lot of people who have done a lot of hard work to get to that point.”

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Indeed, N-able took more of a circuitous route to its ultimate destination than its founders probably anticipated.

Local entrepreneurs Mark Scott and Gavin Garbutt created the company to provide a platform that could remotely operate and manage networks for SMEs that didn’t have their own IT departments. The firm sold its products to third-party managed service providers, quickly signing up hundreds of customers.

N-able eventually grew to about 150 employees before being acquired by Texas-based SolarWinds in 2013 for US$120 million. The U.S. company made similar tools, but it targeted much larger enterprise-level clients and was looking to expand its customer base.

Steady growth

“They researched all the platforms and they chose us,” Cullen said.

A few years later, SolarWinds made another major M&A move in a bid to consolidate its market position, acquiring one of N-able’s largest competitors, Scotland’s LogicNow, and merging the two companies into a separate business that served more than 25,000 MSPs.

While the operation continued to grow at a steady clip, SolarWinds announced last summer it was spinning N-able off into a separate publicly traded entity. The board of directors felt both sides of the business would be better off if they were able to concentrate their efforts on serving the markets they knew best.

“SolarWinds was attracted to us because we were in the same space,” Cullen explained. “But what we realized over the years is they were very much focused on the big-market and the enterprise (customers segment). We were very much focused on the SME market. There wasn’t that much overlap. We felt we could meet the needs of our individual customers much better individually than together.”

As it begins its journey as a separate public company, N-able sees plenty of growth opportunities ahead. The firm is on pace to generate $340 million in revenues this year, and Cullen says it intends to adhere to the “rule of 50” that has been SolarWinds’ perennial guidepost – that is, its revenue and EBITDA profit growth rate should always total that sum.

“If you look at our model, there are so many vectors of growth for us.”

“If you look at our model, there are so many vectors of growth for us,” he said, pointing to European countries such as Spain, Italy and Portugal as well as the Asia-Pacific region as markets in which the MSP model is gaining momentum and offering fertile ground for expansion.

While N-able is headquartered in Boston, where CEO John Pagliuca and several other top-ranking executives live, Ottawa is the largest of its six main hubs that also include Durham, N.C., Bucharest, Edinburgh and Manila.

Cullen and N-able’s vice-president of worldwide sales, Frank Colletti, both call the National Capital Region home. The firm employs a total of about 250 people in the city. 

N-able is currently looking to hire an additional 30 or so workers in Ottawa, and Cullen says there are plenty more jobs to come.

“There’s going to be a lot more growth in Ottawa,” he said. “There’s a lot of good talent and there’s not the same level of competition that would be in the Bay Area, for example.”

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