Vision Critical (VC), the Vancouver based customer research startup, has announced on Wednesday reaching an agreement with Maru Group. The latter part is holding company that deals with real estate development and administration. Through reaching the agreement, VC has cleared a major hurdle on its path to an initial public offering (IPO) with selling one of its two divisions.
The Canadian tech company provides software to help clients building communities of customers for gathering feedback on new products and approaches. VC's clients include Nascar and Banana Republic.
Canada's one of the most successful emerging tech companies, VC is partly owned by Pollster Angus Reid and founded by his son, Andrew Reid. The tech company is going to sell its market research consulting division. The division accounts for about one-third of revenue and employs around 20% of VC's 800 employees, reports The Globe And Mail.
The deal is expected to close in early 2016. Under the agreement, Maru Group will acquire VC's North American research consulting division and operate it as a separate entity to be known as MARU/VCR&C. The executive consulting team of VC will continue to lead the entity and its 160 employees will retain their jobs in the merged entity, reports Financial Post. The consulting arm spinning will enable VC to focus more on the software platform. The Canadian company has declined to disclose the amount involved in the agreement. VC is retaining a revenue sharing agreement with Maru Group, reports Bloomberg quoting Scott Miller, CEO of VC, while addressing an interview. VC has long been considered as a top Canadian tech IPO candidate. It has generated roughly $130 million in revenue during 2015. VC's management and board have been concerned dragging on its value as a public company. Software revenues have been growing in excess of 30% per year and related gross margins have exceeded 70% of revenues. Meanwhile, revenue and margins for the consulting business have been accounted roughly half of those levels or less. Comparative features on business growth and revenue earning, have helped VC to dispose of the consulting arm. The entire sale process, code-named 'Moonshot' internally, has been in the works for about a year. It is widely assumed that the deal exceeds $50 million. VC has raised $47 million from investors including OMERS Ventures and Angus Reid.
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