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A screengrab from 20-20 Technologies’ website.

Montreal-based 20-20 Technologies Inc. has been snapped up by a foreign-based buyer, the latest in a wave of takeovers that has spurred a dramatic decline in homegrown high-tech companies since the height of the dot-com bubble.

The company, which started as a cabinet maker in 1987 and grew into a global leader in software for computer-aided design, business and manufacturing in the interior design and furniture industries, has agreed to be acquired by an affiliate of San Franciso private equity firm Vector Capital Corp. for about $77-million or $4 per share.

The offer represents a 28-per-cent premium over 20-20's closing share price on April 3, the last trading day before a strategic review process for 20-20 was announced, and a 33-per-cent premium over the average closing price in the 90 days before April 3.

While far from a blockbuster, the deal highlights a broader trend in Canada's high-tech sector, which has been bemoaning the lack of a mature financing system that could ensure budding tech firms like 20-20 remain in the country and grow into larger, more internationally oriented ventures. Last year, 45 Canadian tech firms were snapped up by foreign buyers, up from 32 the year before and fewer than 15 per year in the mid-2000s, according to Branham Group, an Ottawa market research firm. High-tech companies now account for a razor-thin 1.6 per cent of the TSX composite – down from 41 per cent in July 2000.

Last month, Montreal-based Miranda Technologies Inc., which provides broadcast television technology, agreed to be taken over by St.-Louis-based Belden Inc. in a $345-million deal.

Vancouver's Singular Software, Ottawa's Headwall Software and Halifax's Golstant have all been acquired this month by larger U.S. companies.

Jean-François Grou, 20-20's president and chief executive officer, said in an interview Monday that Vector represents the best fit in terms of helping strengthen the company's international expansion strategy.

More than 50 potential financial and strategic buyers from Canada, the U.S. and Europe were contacted, 20-20 chairman Jocelyn Proteau said in a press release.

"We contacted other Canadian and Quebec-based companies in the [sale] process but we didn't have any preference other than that they maximize shareholder value," Mr. Grou said.

Vector partner Amish Mehta said in the news release that the aim is to invest in innovative products at 20-20 and break into new markets organically as well as through acquisitions, while maintaining a strong presence in Quebec.

The company, which has about 500 employees and operates in 11 countries, is best known for its system for creating and producing interactive 3D animation over the Web to help clients personalize their projects.

Among its products is a system for creating and producing interactive 3D animation online to help customers personalize their projects.

Vector Capital is not new to the Canadian technology sector.

In 2003, it took troubled software giant Corel private. A major revamp took place, non-core businesses were sold and speculative R&D was cut.

Like Corel, 20-20 was subject to pressure from U.S. investors, but Mr. Grou plays down its role in selling the company.

Eric Rosenfeld of Crescendo Partners in New York said in an interview that his firm "had a hand in the outcome" thanks to its proxy battle a year-and-a-half ago that resulted in the appointment of two new directors. The proxy fight "certainly highlighted the value of the company," Mr. Rosenfeld said.

But Mr. Grou said shareholders voted down Crescendo's plan and adding two new independent board members "was a normal part of the board review process."

Mr. Rosenfeld, whose Crescendo owns between 5 and 10 per cent of 20-20, said he's "evaluating" Vector's proposal.

The board of 20-20 has unanimously recommended that shareholders vote for the deal.

A special shareholders' meeting is planned for September.

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