U.S. investment giants Vista Equity Partners Management LLC and Blackstone Inc. BX-N +0.15%increase have quietly bought out one of Canada’s most successful enterprise software vendors, Assent Inc., sources say.
The buyers paid about US$400-million to Assent’s other venture-capital investors in a deal valuing the Ottawa company at roughly $1.3-billion. Assent helps 1,000 global industrial companies, including Honeywell International Inc., Boeing Co., General Electric Co., Johnson & Johnson and Toshiba Corp., keep up with regulatory and ethical standards by tracking activity by their supply chain partners on its cloud software platform.
The 1,000-person company has grown steadily, posting 44 straight quarters of annual recurring revenue growth, and is expanding in the mid-teens, percentagewise. Assent reached US$100-million in annual revenue last year, becoming one of more than 70 private Canadian tech companies to reach that level, according to a recent Globe and Mail report.
Vista first invested near the peak of the pandemic tech bubble in December, 2021, leading a US$350-million deal – mostly buying shares from other shareholders – that valued Assent at US$1-billion. The Vista and Blackstone-led transaction happened in two parts, closing in March.
The deal valued Assent at slightly less than its 2021 mark. But the decline compares favourably with many companies that raised at the peak and are now worth far less than their high-water marks after valuations fell to pre-pandemic levels.
Blackstone, the world’s largest alternative asset manager, and Vista, one of the leading software-focused private equity firms, chose to not announce the deal. Nonetheless, evidence of a change-of-control transaction seeped out recently and was confirmed by three sources familiar with the matter. The Globe and Mail is not identifying the sources, as they are not authorized to discuss the matter.
Two early investors, Boston’s Volition Capital and Toronto-based First Ascent Ventures, recently posted online that they’d sold to Vista. And when Assent replaced long-time chief executive officer Andrew Waitman in late May (he is now executive chairman) with veteran American tech executive Michael Southworth, the incoming CEO thanked board members by name in a LinkedIn post.
His list revealed Vista now had three directors on the Assent board, up from two, and that another newcomer had joined: David Schwartz, senior managing director with Blackstone Private Equity Strategies. Two directors who had represented U.S. private equity giant Warburg Pincus LLC since it invested US$100-million in 2018 weren’t on his list. Volition, First Ascent, Warburg Pincus, and U.S. investor StepStone Group Inc. all sold out in the deal, the sources said.
In response to queries by The Globe over the weekend, several parties confirmed limited details. Vista spokesperson Brian Steel only confirmed “a transaction” had occurred. Assent spokesperson Charmaine D’Silva declined to disclose details, but said in an e-mail that “we’re incredibly proud of the continued confidence Vista Equity Partners has placed in Assent.”
Ms. D’Silva noted Assent had also appointed another veteran American outsider, Mark Smith, as chief customer officer: “We’re entering a new phase of growth and customer focus.”
Tony van Marken, managing partner of First Ascent, said in an e-mail that the deal stemmed from Warburg Pincus deciding last year to sell out. Mr. van Marken noted his fund was Assent’s sole Canadian institutional backer and that the investment was lucrative, returning $50-million, or 6.2 times the capital that First Ascent’s $102-million Fund 1 put into the company.
“As a former entrepreneur I give all the credit to Andrew Waitman and the founders, they built an incredible company and a category leader that I believe will continue to be a remarkable Canadian success story,” he said.
The two Warburg managing directors who left the board, Justin Sadrian and Sam Lipsick, said in an e-mail Sunday that they were “incredibly pleased” Assent had increased revenue more than sevenfold during their holding period.
“Vista has been a great partner to us over the last few years, and we look forward to following where they and the new shareholder group take the business forward.”
Assent was founded in an Ottawa pool house by two local boxers, Matt Whitteker and Jonathan Hughes, and incorporated in 2010. It grew rapidly after Mr. Waitman, an ex-venture capitalist and previously CEO of Ottawa IT services firm Pythian Group Inc., joined as CEO in 2014 after learning of the opportunity from Mr. Whitteker, his sparring partner at a local gym.
Assent had 25 employees and US$1-million in annual recurring revenue at the time, and Mr. Waitman invested C$1-million of his own money when he joined. Mr. Whitteker left in 2020 and now leads MILLIONS.co, a social commerce and video platform startup Mr. Hughes is Assent’s director of strategic partnerships and a board member.
It’s an otherwise dry time for exits in tech, including takeovers and initial public offerings, as persistently high interest rates and economic uncertainty unleashed by U.S. President Donald Trump’s tariff war weigh on valuations and deal activity.
“The mergers and acquisitions market remains slow and measured,” said Kim Furlong, CEO of the Canadian Venture Capital and Private Equity Association, in a Sunday text message.