Some good news has emerged for the employees at Waterloo’s Intelligent Mechatronic Systems Inc., and just in time for the holidays. The company, also known as IMS, has been acquired by British telematics company Trak Global Group, rescuing IMS from receivership.
IMS technology tracks data generated from cars and trucks, valuable to insurance companies and for use in, for example, calculating tolls on highways.
Trak Global provides technology for nearly a quarter of usage-based insurance policies in the U.K., and is a telematics supplier to the vehicle rental and mobility sector. The combined group connects more than 500,000 vehicles around the world, the companies said in a release, and generate annual revenues of more than US$50 million.
“The two businesses are very hand-in-glove,” said Nick Corrie, Trak Global Group CEO, speaking to Communitech News from England on Friday. Trak, with 200 employees, is based in Crewe, in the northwest of the British mainland.
“Areas where I needed to invest in, IMS had already done so; areas where IMS needed to invest, we had already invested. So the jigsaw fit perfectly. It wasn’t a difficult decision to make once we could get the price right and the terms of the deal right.”
IMS, founded in 1999 by University of Waterloo professor Otman Basir, was placed in receivership in September of 2018. Court documents, the Waterloo Region Record reported, showed IMS and affiliated Ridetones Inc., owed lenders more than $28 million as of last August. Toronto venture capital firm B.E.S.T Funds made a $4-million investment in IMS in 2013, the Record said.
IMS has a combined portfolio of 200 patents and patents pending.
Terms of the acquisition were undisclosed.
“When businesses go into [receivership] bad things have happened,” said Corrie. “IMS is a great business. It’s full of incredibly talented people and they just got themselves into a bit of pickle with debt, so the receivership process sorted that out and [now] we’ve sort of tidied up the business and tried to make sure we get it in a position where it can sustain itself and that we invest in it appropriately. Our acquisition isn’t just buying it; we’re investing in it.”
In 2017, IMS was on the Mediacorp Canada list of the top 20 employers in Waterloo Region and at that time had as many as 118 employers. Sixty-five people now work at the firm and Corrie said he wants to bring that number back above 100 within six months.
“In the end it will all be determined how successful we are with revenues and customers but we see a business that can grow really quickly,” Corrie said.
Corrie said that Trak was ready for expansion and it liked the idea of moving into North America through a Canadian company rather than one in the U.S.
“We’ve become pretty big in the U.K., and we needed to find an outlet to continue our growth and we thought North America was perfect,” he said. “And a Canadian business just felt, as Brits, as an easier step than straight to a U.S. business. So it was the perfect opportunity.”
And as for Waterloo, aside from the material synergies of the two companies, Corrie said he was additionally attracted by what he’s seen of the Waterloo Region technology ecosystem and the existing talent at IMS.
“In the end, any business, in any sector, is about the talent that works in the business, and the opportunity to be able to attract talent,” he said.
“We’re quite keen to bring the businesses very close together. And we can grow where the talent is and I think Waterloo [Region] is a perfect place to grow a business.”
As an indication of Trak’s commitment to its Waterloo employees and blending its operations, Corrie said the company has invited all its Waterloo staff to the U.K. for the company’s Christmas party – and to pay all their expenses. “Quite a few are coming.”
Corrie said that he would temporarily take over leadership of the Waterloo company, commuting from the U.K. as needed, but expects that “local leadership will eventually emerge.
“I’m stepping in to look after it, but there is a great team there. My role is just to make sure, in the first few months, that they’ve got the support they need to be effective and that the money finds its way to the right places for investment and the recruitment decisions are good.”
“I don’t know if you use the expression post-traumatic stress disorder. They’ve been through a receivership. It’s traumatic. The traditional sense, in these sorts of acquisitions, is to be very corporate. We’re not very corporate. We’re a small business. I started the business nine years ago and we’re fortunate to have got to the position where we are in a short time in Europe.
“So, I’m simply looking after the shop while the new team finds its feet, is the way I’d describe it. I think local leadership will emerge.
“It’s been a sad story. I just think bad things happen sometimes. We’ve come along to try to rescue it. We have. Now we have to make it flourish.”
