Poka Inc. co-founder and CEO Alex Leclerc, right, and co-founder and CTO Antoine Bisson inside their offices in Montreal in May 2021.Christinne Muschi/Christinne Muschi/The Globe and
Swedish enterprise technology giant IFS World Operations AB has bought Quebec City’s Poka Inc., as deep-pocketed buyers continue to have a healthy appetite for successful Canadian tech firms.
The terms of the deal were not disclosed, but IFS chief executive Darren Roos said in an interview that the acquisition price was “not far off” $200-million.
Poka has won over some of the world’s largest manufacturers with a platform its founders have described as “Facebook for factories.” It allows factory operators to post user-friendly how-to videos on internal social media for employees to quickly troubleshoot equipment issues and train on new processes.
Its technology is now used by some 250,000 workers at more than 2,000 factories around the world – up from 100,000 and 500 two years ago, when revenues were $15-million a year. Poka is being deployed at dozens of factories by Danone SA, Robert Bosch GmbH and Nestlé SA. Other customers include Rio Tinto, Alcoa, Tetra Pak Group, Mars, Coty, Hitachi Energy, Aveva Group and Kraft Heinz Co.
“Our focus is to make sure we put Poka into as many businesses globally” as possible, Mr. Roos said.
“There are only a few connected-worker assets in the market in that general vicinity of growth,” said Scott MacDonald, managing partner with Poka investor McRock Capital.
Chief executive Alex Leclerc came up with the idea for Poka 11 years ago while working as an operations specialist for the cookie and granola bar maker started by his great-great-grandfather, Biscuits Leclerc Ltd. He saw the family company struggle to pass knowledge about its machines and operations between workers on different shifts using paper instructions. That affected operations, quality and safety.
So he invited childhood friend Antoine Bisson, a software engineer working at Microsoft in Seattle, to start a venture to bring modern mobile communications tools to the factory floor, starting with Leclerc’s eight factories. The duo were inspired by the proliferation of quick how-to videos on YouTube, reasoning that factories could benefit from engaging online tools. Their technology helped Leclerc cut training times by 75 per cent, reduce equipment downtime and shorten changeovers.
By 2014, they were ready to go to market. When Mr. Leclerc’s father, Denis, president of the cookie company, offered to invest, his son turned him down, determined to prove he could succeed without family money. The elder Leclerc eventually did invest, joining Canadian funds Inovia Capital, McRock and the Caisse de dépôt et placement du Québec, as well as the venture-capital arms of manufacturing giants Standard Industries, Bosch and Schneider Electric SE.
Poka increased revenues almost 60 per cent last year and is on track to see 40-per-cent-plus gains this year, Mr. Leclerc said. It has 140 employees and plans to reach operating profitability next year.
Mr. Leclerc said Poka received several acquisition entreaties last year and hired investment banking firm AGC Partners after private equity-backed QAD Inc. bought rival Redzone early this year. Poka still had more than two years of cash and did not need money. “It was more about, ‘How do we accelerate growth so we can get as many customers as we can as quickly as we can and take the market,’ ” he said.
Like many technology buyers, IFS is backed by private equity – including minority owner Hg Capital LLP, an active investor in Canada. It has made a string of acquisitions, including two in Canada, and is on track to generate US$1.3-billion in revenue and US$350-million in operating earnings this year. IFS isn’t just growing by way of acquisitions; it is increasing revenues 20 per cent annually from its core business, selling enterprise resource planning, field service management and asset management software to large enterprises, including manufacturers.
“Companies have invested so much in white-collar workers historically. Now we have the opportunity to digitally enable blue-collar workers, and there is huge untapped value for organizations to do that,” Mr. Roos said. “Poka, as a leader in the space, was an obvious partner. The technology is proven and built out. We’re able to bring global expansion and scale to accelerate the growth and take it global. And we really liked Antoine and Alex,” who are staying on to run Poka and are taking much of their proceeds in IFS shares.
The Poka deal follows private equity-backed takeovers this year of Canadian companies Magnet Forensics, Hostaway and Absolute Software. Deal volumes are down sharply but are expected to pick up as private equity firms look to deploy record amounts of capital amid an ongoing slump in the tech sector.