Montreal’s Workleap Technologies Inc. has bought its first company since raising $125-million from the Caisse de dépôt et placement du Québec to pursue acquisitions.
Workleap, formerly called GSoft Inc., picked up Texas-based Pingboard Inc., which makes software used by employees at 2,000 medium-sized companies to track workplace organization charts and connect with colleagues. Terms were not disclosed but an industry source said Workleap paid between $30-million and $60-million for Pingboard, which generates $10-million-plus in annual revenue. The Globe and Mail is not identifying the source as they are not authorized to discuss the matter.
Workleap was founded 17 years ago by a trio of 20-year-olds including chief executive officer Simon De Baene. They never took outside funding or made an acquisition until this year, when the profitable company surpassed US$100-million in annualized recurring revenue. Workleap made its first deal early this year before the Caisse investment, buying a small Quebec City learning management system software provider.
The company started as a typical for-hire software contractor, shifting to building its own products for business customers in 2009. It bet big on the cloud-based Microsoft 365 early on, building its own tool, called ShareGate, which it says is used by more than 75,000 information technology professionals to navigate the business software platform. Workleap has 400 employees and 20,000 customers in 100 countries, primarily serving the U.S., Canadian and British markets. It is on track to grow revenues by more than 20 per cent this year, Mr. De Baene said in an interview.
The company is now building an “employee experience” platform that will bring together all of its programs, including human resources management tools to onboard employees, provide career and skills development and manage performance improvement. Mr. De Baene said Workleap will incorporate Pingboard’s offering into the platform and keep on 31 of its 40 employees, including chief technology officer Rob Eanes, who will become vice-president of product. Pingboard CEO Laith Dahiyat is not joining Workleap.
Mr. De Baene said Workleap plans to continue creating products while also buying companies whose offerings can be incorporated into its platform. He expects that the initial Caisse funding will finance three to four acquisitions, and that Workleap will focus on purchasing companies with $5-million or more in revenues.
Workleap has entered the acquisitions arena two years after a crash in tech valuations that reduced prices for up-and-coming software companies to prepandemic bubble levels. Many smaller companies have had to slash expenditures to shift away from a growth-at-all-costs strategy and prepare for a potentially prolonged period of muted investor interest and tempered demand from cautious customers.
“It’s a buyer’s market,” Mr. De Baene said. “There are definitely good products out there that are facing a lot of headwinds in this market. Some are choosing to join a bigger player like us to bring their products to another level. This is what brought us to Pingboard.”
Ed Bryant, CEO of Ottawa-based Sampford Advisors, a mid-market tech-focused mergers and acquisitions advisory firm, said deal activity is picking up after “a pretty dry 2023.”
“Next year looks pretty encouraging” for deals, he added, particularly in the U.S. owing to a growing consensus that the economy is in for “more of a soft landing than a big recession. It’s still to be determined in Canada because we’re in worse shape.”