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Software company Calgary has signed a $ 500 million acquisition agreement

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Absorb was a largely overburdened company until 2017 when it completed a $ 59 million growth / recap investment from Silversmith Capital Partners, a Boston-based growth stock company

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Amanda Stephenson • • Calgary Herald Mike Owens, CEO of Absorb Software. Photo from Absorb Software

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A Calgary-based software company with ambitious growth plans is tied to a valuation of more than half a billion dollars.

Absorb Software announced on Tuesday that it would be acquired by major US private equity firms Welsh, Carson, Anderson and Stowe. The financial terms of the deal were not disclosed, but the company said the deal is based on an appraisal of more than $ 500 million.

Founded in Calgary in 2002, Absorb produces cloud-based learning management system software that enables companies to provide online training to their employees and their extended supply chain. The company currently has more than 1,400 customers – including giants like Anheuser-Busch and Uber, as well as a wide range of small and medium-sized businesses – in 34 countries worldwide.

Absorb was a largely overburdened company until 2017 when it completed a $ 59 million growth / recap investment from Silversmith Capital Partners, a Boston-based growth stock company.

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“It made us grow faster and brought us up to date,” said Absorb founder and CEO Mike Owens, who along with other members of the Absorb management team will remain a key shareholder in the company. “I think we’ve grown by about 150 people in the last two and a half years.”

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Absorb currently employs around 300 people, of which around 225 are based in Calgary. The rest is spread across the branches in London, Dublin, Shanghai, Sydney, Boston and Tampa. Owens said the acquisition by Welsh, Carson, Anderson and Stowe will allow Absorb to accelerate product development and should mean hiring an additional 100 to 150 employees – the majority in Calgary – within the next year.

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Absorb saw record growth among companies in 2020, according to Owens. It hit the $ 50 million milestone in recurring annual sales and grew its global customer base more than 167 percent year over year as the COVID-19 pandemic forced companies to switch to work-from-home models and increased the demand for absorb products.

But he added the company was in a good position even before the pandemic and recently rented 80,000 square feet in the new Telus Sky Tower downtown to accommodate its growth.

Owens believes his company is following a similar path as two other Calgary-born software companies – Solium and Benevity – both acquired for more than $ 1 billion in recent years, which gives them coveted unicorn status. He said Calgary tech companies have traditionally struggled to attract venture capital, but that is beginning to change.

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“The software ecosystem for entrepreneurs and growing businesses in Calgary is now very different from what it was in early 2002,” said Owens. “Banks understand a lot better, industry understands a lot better, and every time someone like us or another of the success stories brings a big investor to Calgary, it attracts different investment funds.”

Owens, who continues to serve as CEO, said his ultimate goal is to get Absorb to the public within the next few years. Describing himself as a “proud Albertan,” Owens hopes Absorb can play a role in fueling the diversification and growth of the tech sector in the province.

“This company is a dream. We literally moved one of my kids from the bedroom to the other so we could start the company in the nursery, ”Owen said. “And it grew from there. I would love it if it inspires other entrepreneurs to make their own software dreams come true. “

astephenson@postmedia.com

Twitter: @AmandaMsteph

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