Miovision Technologies Inc. has made a pivotal acquisition financed by three large Canadian technology investors, establishing the Kitchener, Ont., company as one of North America’s leading smart-city equipment vendors.
The traffic-management technology maker is buying Global Traffic Technologies LLC (GTT) from Raleigh, N.C.-based Vontier Corp. for US$107-million. GTT is a dominant player in its niche selling technology that enables emergency vehicles to trigger signal changes as they approach intersections, giving them priority to get to their destinations faster. GTT is slow growing but profitable, generating US$40-million in revenue and US$11-million in operating profit last year.
It will give Miovision an expanded market for selling its wares, used by governments to monitor and study traffic flows for planning purposes and detect real-time traffic patterns to adjust and optimize signalling. GTT is used at more than 90,000 intersections in 3,100 cities globally. By contrast, Miovision products serve 10,000 intersections in 450 cities.
GTT “is exactly what Miovision has been looking for,” said Miovision board member Chris Wormald. “This gives them a ton more reach into a ton more intersections. When part of the job is winning the intersection, this just lets them play their game of land-and-expand.”
To finance the deal, Miovision has raised US$150-million from Maverix Private Equity, Telus Corp.’s venture capital unit and Export Development Canada. Each is investing US$50-million, with US$125-million going to the company and US$25-million to early investors.
Telus T-T, which led a $120-million financing of Miovision in 2020, will additionally buy out early backer MacKinnon, Bennett & Co. for $52-million.
All told, the trio of backers will pick up $260-million of Miovision, one of the biggest investments into a Canadian tech company in the past year as sector conditions deteriorated.
“One of our stated missions is to build Canadian-based global champions, and we believe that Miovision will be the global champion in the smart-cities space,” Maverix managing partner Mark Maybank said.
The financing came together after Miovision emerged as the winning bidder for St. Paul, Minn.-based GTT in a sale process. GTT’s parent Vontier is a spinout of a spinout of Danaher Corp., which bought the traffic tech vendor in 2016 from TorQuest Capital Partners, nine years after the Canadian private equity firm purchased it from 3M Co.
“Miovision had a game-changing opportunity and needed someone to act quickly,” to finance the deal, said Guillermo Freire, senior vice-president, mid-market with EDC, which has stepped up its support for expanding export-oriented Canadian technology companies recently. “We acted without hesitation given the opportunity” and conviction about Miovision’s market leadership, he said.
The smart-city sector has gone through several hype cycles in the past 15 years as multinational tech companies such as IBM, Cisco, Siemens and Google’s now-defunct sister company Sidewalk Labs tried and largely failed to turn cities into profit centres.
But Miovision may have a leg up, and not just because it’s smaller and nimbler. This financing brings together two of the keenest students of Sidewalk Labs’ controversial attempt to build a neighbourhood in Toronto, which was cancelled in 2020.
Miovision CEO Kurtis McBride was courted by Sidewalk for a partnership, which he declined; he instead became one of its biggest sources of scrutiny as an adviser for its government partner. Maverix co-founder John Ruffolo, meanwhile, had led a losing bid for the land Sidewalk won, and raised warnings early on that Sidewalk’s proposals presented serious concerns.
Mr. McBride cofounded Miovision in 2005 after completing a work term as a traffic counter while studying system design at the University of Waterloo. During his studies, he developed a system that could automate traffic-counting collection using computer vision, a form of artificial intelligence that draws data from digital images. Then he built a company to take it to market.
Miovision’s internet-connected technology consists of a machine slightly larger than a laptop that sits in a cabinet at intersections and plugs into the signalling system, fed by data from a 360-degree camera perched atop a light standard.
Mr. Ruffolo, who had previously passed on opportunities to invest in Miovision when he led pension giant OMERS’ venture capital group, told The Globe and Mail he was impressed by its 100-per-cent-plus growth last year and the quality of GTT.
The deal is also a continuation of Miovision’s strategy to turn its business into more of a platform play.
“The intersection today is very much like the presmartphone age,” Mr. McBride said. “Every time you want to add a new function, it’s a new piece of hardware, another capital purchase” requiring manual installation. “Our whole product paradigm is around trying to use a single device and through software extend its functionality to do more things over time.”
To that end, Miovision began buying companies 18 months ago to deliver new applications, including safety analytics to detect dangerous intersections and controls to optimize signal changes. Miovision, which brought in just under $80-million in revenue last year, should end 2023 generating close to $200-million on an annualized basis and will go public once the market rebounds, Mr. McBride said.
Sean Silcoff
Josh O’Kane