American private equity giant KKR has bought Corel for a reported US$1-billion from Vector Capital, which bought control of the one-time Ottawa software star 16 years ago.
Corel Corp., founded by flashy entrepreneur Michael Cowpland in the 1980s, built its name on its CorelDRAW software and attempted to compete with Microsoft Corp. by buying WordPerfect in 1996. But that strategy did little to boost Corel’s performance and the company languished until it was taken private in an acquisition by Vector Capital in 2003.
The company still provides a portfolio of business software offerings used by more than 90 million people worldwide and has purchased several other software firms under Vector’s ownership. KKR & Co. Inc. said in a release that Corel would continue as an acquisitor on its watch.
“Corel has differentiated itself by offering an impressive portfolio of essential tools and services for connected knowledge workers – across devices, operating systems, and a range of fast-growing industries,” KKR’s John Park said in a release, which did not disclose the terms of the deal after media reports said the value exceeded US$1-billion.
“KKR looks forward to working together with management to drive continued growth across its existing platforms while leveraging the team’s extensive experience in M&A to deliver a new chapter of innovation and growth on a global scale.”
In an interview with The Globe and Mail, Corel chief executive Patrick Nichols said: “KKR has a deep technology expertise from an acquisition perspective. I think that KKR is the perfect investment partner for the operating team that we’ve built over the years.”
Mr. Nichols, who joined the company in 2009, would not comment on the impact to employees, but said that Corel will continue to be based in Ottawa.
“Corel has been an important part of the Vector Capital family for many years and we are pleased to have achieved a fantastic outcome for our investors with the sale to KKR,” Alex Slusky, Vector Capital’s founder and chief investment officer, said in the release.
“Under Vector’s ownership, Corel completed multiple transformative acquisitions, grew revenue and meaningfully improved profitability, highlighting Vector’s proven strategy of partnering with management teams to position companies for long-term success. We are confident the company has found a great partner with KKR and wish them continued success together.”
Private-equity firms have in the past decade moved beyond the mega-leveraged buyout deals of the pre-credit-crisis era to become some of the largest investors in the technology space, typically preferring more mature tech companies.
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