Nymity Inc., a Toronto-based software company in the burgeoning field of data-privacy compliance, has been acquired by TrustArc Inc., its larger U.S. rival.
Nymity founder and sole owner Terry McQuay said he sold his 17-year-old company after deciding last summer “to look at options to take it to the next level.”
His company’s software platform helps corporate customers comply with various privacy laws in part by flagging any shortcomings in how they collect, store and use customer data, and comparing their performance against industry peers. Nymity customers include General Electric Co., General Motors Co., Merck & Co., McGraw Hill Education Inc., Barclays PLC and Manulife Financial Corp.
The 65-person company, which has never taken outside funding, has seen revenues climb by 30 per cent to 40 per cent per year and has been profitable. It is selling into a growing market spurred on by regulatory changes regarding data privacy in the Europe, North America and elsewhere that require companies to keep up with growing compliance requirements. “It’s a very hot market right now,” Mr. McQuay said.
San Francisco-based TrustArc, which began life as a non-profit organization 22 years ago and later became a venture-capital-backed private corporation, has more than 300 employees split between its hometown and a development centre in the Philippines, and about 1,000 customers. Hilary Wandall, TrustArc’s general counsel and senior vice-president of privacy intelligence, said the company plans to make Canada its “key development centre” following the acquisition, with operations in Toronto and Vancouver. Mr. McQuay plans to stay on with the company. “I’m not going anywhere,” he said.
Ms. Wandall did not disclose the value of the transaction but said it represented a “significant component” of the US$70-million TrustArc raised in a private-equity financing led by New York-based Bregal Sagemount that was announced in July. Ms. Wandall said the deal would combine the second- and third-largest players in their market niche behind leader OneTrust LLC, giving the combined entity a complement of about 1,500 customers and enabling it to accelerate growth and development at a time when dozens of companies are entering the space.
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Sean Silcoff