Chalk one up for the Calgary tech scene, and one more for the school of hard work, teamwork, and entrepreneurial innovation. Yesterday, Pason Systems Inc. announced its acquisition of all the outstanding shares of Calgary born and bred Verdazo Analytics Inc.
Privately owned Verdazo (formerly known as Visage Information Solutions before a Spring 2016 rebrand) was founded from scratch in 2006 without any outside investment. Right from the start, the company’s flagship data analytics product found a niche among energy producers looking to make informed decisions on how to enhance production, improve operations, and increase overall profitability. Over time, the size and scale of Verdazo’s clients broadened to eventually include oil and gas producers both big and small, financial services companies, and energy services providers.
“When we started in Calgary, our vision was to build a best of breed product, become thought leaders, and provide our prospective clients in Calgary [and Canada for that matter] a piece of software they couldn’t afford to not have,” says Groulx.
With that ambition largely realized after ten years of hard work, Verdazo’s management began to expand their vision with a desire to take their company to the next level. “All of sudden we thought, lets make our product one that our target market in North America can’t afford to not have, leveraging what we’ve accomplished in Canada”
And with those newfound ambitions, the question for Groulx and his team quickly became how to best approach tackling the 600 pound gorilla to the south. Prior to joining with Pason, Verdazo enjoyed an annual growth rate of 50% all without the use of a dedicated salesforce. Yet despite those impressive numbers, the team knew they would need to find a partner to help them achieve their goals to expand geographically. By leveraging another company’s US sales and marketing capabilities, it became clear that this was to be the most logical way to enter the US market in a meaningful way.
“We looked at many different potential partners to help us leverage their presence in the United States, but it was clear that Pason was best fit” says Groulx. By teaming up with the much larger Pason, Groulx likens Verdazo’s American sales and marketing efforts to now be turbocharged.
“Our thinking was that by working with Pason, it would give us greater market reach and also access to their decades of drilling data experience,” said Groulx. “While we’ve always provided analytics for financial, public, and production data, we would finally have access to world class drilling data expertise and together we would be able to create even more value for our combined clients.”
Meanwhile, just as the Verdazo team began mulling their growth strategy, Pason began thinking about pursuing a strategy of revenue diversification. Doing so would enable Pason to better weather the storms of the cyclical commodity business they have always been subject to. Publicly traded with a $1.74 billion market cap, Calgary based Pason over the years has established itself as a leading global provider of specialized data management systems for oil and gas drilling rigs. And although headquartered in Calgary, much of the company’s revenue comes from clients based in the United States, Canada, and around the world.
What’s more, Pason’s customers had long sought analytics for their proprietary drilling data. And so, with all that in mind, the company established a New Ventures team at the end of 2015 to assess opportunities to diversify their operations through organic growth, acquisitions, and partnerships. With a strong background in energy industry capital markets, Kevin Lo came on board as the team’s Vice President.
“When Pason first started the group, we wanted to determine if there were analytics tools that looked promising,” says Lo. “After a long search, we ultimately acquired Verdazo because of their strong product that eliminated complexities to effective analyses.”
With complementary strategic rationales for teaming up, both Lo and Groulx both point out however, that at the end of the day, it was each company’s similar culture and approach to work that really sealed the deal. Because although each company relies heavily upon intellectual property to provide value to their clients, both companies still are nothing much more than the people who come to work each day.
“Verdazo is a tight team with flat hierarchy, great communication, a sense of fun and an appreciation for family,” says Groulx. “Although Pason is as big a company as it is, somehow they have managed to maintain a friendly small company feel with much the same approach to work as us. The more people I talked to about Pason, it didn’t take long for me to get a sense that we wouldn’t lose.”
“Excellent customer service is a point of pride for us at Pason, and that was something we learned we shared in common with the team at Verdazo. That went a long way to making this deal happen,” says Lo.
“We are thrilled to welcome Verdazo and its entire team to Pason,” says Marcel Kessler, Pason’s President and Chief Executive Officer. “We believe Verdazo has developed a compelling data analytics offering for users in the oil and gas industry. Together, we look forward to providing energy professionals best-in-class capabilities to collect and analyze data.”
Going forward, it will remain business as usual for the Verdazo team as it continues to operate as a standalone business and under the same brand. If nothing else, Pason’s acquisition just goes to show that Calgary’s vibrant tech scene, with its developing talent pool, is becoming ever more sophisticated. As Groulx says, “if you have an idea and are willing to work hard, Calgary is a great place to start and base a tech business.”