The second half of 2020 was the best period ever for exits in the Atlantic Canadian innovation community, creating wealth for founders and investors. In fact, we’ve recently learned of two under-the-radar deals that add to the growing number of companies that were taken over in that period.

In October, Sherbrooke, Que.-based Sherweb purchased PurelyHR of Moncton for an undisclosed price. And in November, Oakville, Ont.-based Spark Power Group Inc. announced the purchase of One Wind Services Inc. of Dartmouth for as much as $17 million.

These are, of course, mere minnows compared to the whale of a deal that St. John’s-based Verafin announced in September – its US$2.75 billion (C$3.6 billion) sale to Nasdaq of New York. But they contributed to a six-month period in which eight companies exited.

One reason the Verafin deal was important was that the company said the founders and staff made up the largest holders of Verafin stock. So it’s easy to estimate there is more than C$1 billion in wealth being created in Newfoundland and Labrador just from the Verafin deal.

The second-biggest deal of late 2020 was Halifax-based Kinduct, which was sold to mCube, a Silicon Valley company that produces the world’s smallest sensors. The companies didn’t disclose the price, but it was probably in the high eight figures. Kinduct had a few angel investors, including its Chair John Risley, one of the most influential business people in the region.

PurelyHR – whose corporate name was Ironflow Technologies – specialized in HR management software and was led by CEO Jason Gendron.  The company developed a Software-as-a-Service product that helps SMEs with a range of human resources tasks. In 2019, it launched Performance, which helps managers with the employee evaluation process.

Now it is part of Sherweb, whose robust platform and business-critical solutions simplify the cloud for businesses around the world. They support an ecosystem of more than 6,000 partners and 60,000 companies across 100 countries.

“This is a great opportunity for PurelyHR, Sherweb and all the businesses that we can support together,” said Gendron in a statement when the deal was announced. “Our software will be elevated by their investment and technology innovation expertise, so we can further improve our customers’ efficiency and productivity,”

Spark Power is a publicly listed company based in Ontario that provides end-to-end electrical contracting, operations, maintenance services, and energy sustainability solutions in North America.

It agreed to pay $13 million at the close and as much as $4 million in deferred payment for One Wind, for a total of up to $17 million.

With operations in Nova Scotia and Texas, One Wind specialized in operations and maintenance and construction-related services to renewable power providers, manufacturers and real estate developers.

One Wind reported annual revenues of about $24 million as of 2019, about 80 percent of it in the U.S. market, and adjusted earnings of about $4 million.

"This is an excellent fit for both our companies," said One Wind President Paul Pynn at the time. "Economic forces, customer demands, and environmental needs are disrupting the electrical industry as we know it and driving a shift toward clean energy generation.  Joining Spark Power gives us the financial, operational, and strategic backing to provide a richer set of offerings to our collective customers."

The trend of more exits has continued into 2021 with Halifax’s Manifold and Charlottetown’s Screenscape Networks both being purchased in January. Both those companies had angel investors based in the region, who may be in a position to look for other companies to back.