Canadian company buys NZ tech firm

Al Munro, chief executive of Next Window, says the company earned revenue of $48 million last year. Photo / Sarah Ivey

New Zealand-based touch screen technology manufacturer Next Window has been bought by a multibillion-dollar Canadian company.

Next Window earned revenue of $48 million last year, and came close to achieving its target growth rate of 50 per cent this year, said its chief executive Al Monro.

He would not give any indication on how much Smart Technologies - a Calgary-based whiteboard technology maker - paid for Next Window.

Smart was last month preparing an IPO of shares in the hope of raising about $557 million, Canada's Globe and Mail reported.

The IPO placed the value of the company at about $2.8 billion.

Next Window was named the fastest growing New Zealand technology company in the Asia Pacific Fast 500 list, published last year by global consulting and financial services firm Deloitte.

Monro said Next Window's investors - primarily overseas venture capital and private equity firms - would be very pleased with the outcome of the sale.

Next Window also received $750,000 in Government funding from the Foundation for Research, Science and Technology. Smart's acquisition would combine the intellectual property portfolios of both companies and aid the development of new products, Monro said.

"It gives [Next Window] access to a bigger company, a wider range of IP and a bigger balance sheet," he said.

Apart from a few minor changes it would be business as usual at Next Window, Munro said, with the firm's research, development and corporate staff remaining in New Zealand.

He said he would join the Smart executive team as vice-president and remain chief executive of Next Window.

"The vast majority of Next Window people will continue to report to me in the same fashion [as before], but there will be dotted line relationships [with Smart]."

Smart would use Next Window's presence in Asia to increase its own presence in that market sector, he said.

"They're looking at our strength in Asia and also a lot of the stuff we've done in terms of miniaturising technology."

Smart chief executive Nancy Knowlton said it was the right time to diversify the Canadian firm's revenue base beyond the sectors it already served.

"Next Window's core values, business model, patent portfolio and focus on the consumer market make it an attractive acquisition for us."

Monro said skills exchanges would take place between the companies, with two of Next Window's research and development staff already in Canada familiarising themselves with Smart's processes.

Raising capital had been one of the major challenges of building the company since its founding in 2001, he said.

Monro said the problems were caused by the immaturity of New Zealand's venture capital and private equity markets.

"It was a huge frustration - being a good news story and just not being able to raise the money in New Zealand. From that perspective, yes, it hampered growth."

He said the absence of a "savings culture" was one of the reasons for the lack of funding available for high-tech Kiwi start-ups.

Brett O'Riley, chief executive of the New Zealand Information and Communication Technologies Group, said Next Window was a classic example of how Kiwi technology companies could supply niche markets and go on to become global success stories.

"It's definitely a pointer that innovation is alive and well in New Zealand, and companies are developing some pretty significant intellectual property," he said.

"Hopefully an acquisition like this from Smart will also wake investors up to the fact that there are some real nuggets out there in terms of New Zealand companies that have the potential to compete on a global basis."


The Players

Next Window:

* Founded in 2001.

* Revenue of $48m last year.

* Manufactures large format touch screens, such as digital whiteboards for schools, as well as supplying similar technology for desktop computers to companies like Sony, Dell and Hewlett-Packard.

* Conducts its research and development in Auckland, but manufactures its products in China, Thailand and Malaysia.

* Has developed a market presence in Singapore, Taiwan and Korea.

Smart Technologies:

* Founded in 1987.

* Headquartered in Calgary, Canada.

* Manufactures interactive whiteboards.

* Most of its products assembled in Canada.

* Company valued at about $2.8b