Calian acquires training simulation, VR software trailblazers for $15M

Military training VR

Continuing its aggressive M&A strategy, Calian Group is adding virtual-reality and training-simulation software to its growing list of offerings after acquiring a pair of local tech firms.

Calian – whose products and services include rapid COVID testing and antennas for satellite systems – said Thursday it bought affiliated companies SimFront and SimWave in a deal that could be worth up to $15-million if the Kanata-based firms meet their earnings targets.  

Calian paid $9-million up front for the companies, which employ about 50 people and have combined annual revenues of about $9-million. 

Despite their relatively small size, Calian CEO Kevin Ford said the companies are big players in the growing field of virtual-reality and training-simulation software. 

“We’re strengthening our bench of smart people, and these are smart people in that domain,” he told OBJ on Tuesday. “I’m really excited about where this could go.”

SimFront’s software helps customers around the world, including Canada’s Department of National Defence and the U.K. Ministry of Defence, run simulated military training exercises. 

Business partners

Calian has partnered with the company on projects for the Canadian Armed Forces for the past 15 years, and Ford said that familiarity helped seal the deal.

“They were really providing that glue between the simulated (military) environment and our training,” he said. “It’s always nice when you acquire somebody that you’ve worked with and have proven your ability to work with.”

Ford said SimFront’s expansive global footprint – the company also has military clients in the Asia-Pacific region – offers a springboard to new markets for Calian’s training business segment, which is on pace to exceed $70-million in revenues this year.

“They’re punching way above their weight,” he said.

But Ford said the locally engineered VR’s potential extends far beyond the defence industry.

"They’re punching way above their weight."

For example, SimWave’s software simulates life-threatening medical situations at Hamilton’s St. Joseph’s Hospital, where it helps prepare staff to respond to potential real-world emergencies. 

Meanwhile, Calgary-based fuel retailer Parkland uses the firm’s VR technology to teach new drivers how to fill storage tanks safely and efficiently without getting soaked in gasoline. The Kanata firm also built a mobile app that uses 360-degree images to help show managers of Parkland’s chain of convenience stores how to set up new locations.

In addition, Ford sees big upside in the technology’s potential as a broader educational tool.

SimWave’s VR can already be found in the Canadian War Museum, which offers a VR experience that lets visitors feel like they’re advancing with the Canadian assault on Vimy Ridge in 1917, and the Canada Science and Technology Museum, where a virtual locomotive ride lets visitors wearing SimWave’s headsets feel every rumble of the tracks beneath them and smell the scent of burning coal. 

Third acquisition of 2021

“It’s all about bringing more technology and innovation,” Ford explained, adding the firm is also developing platforms to integrate augmented-reality smart glasses such as the Microsoft HoloLens into its training-simulation software.

The acquisition is Calian’s third this year, following deals for antenna systems provider InterTronic Solutions in January and Toronto-based digital health-care and cybersecurity firm Dapasoft in February.

The company’s latest M&A play comes less than two months after the Kanata firm raised its revenue guidance for the third time in 2021. 

Calian is projecting revenues of between $500 million and $525 million for the fiscal year that just ended Sept. 30, with much of that growth driven by acquisitions. 

The firm has closed 10 deals since the start of 2020, and Ford hinted Thursday that he won’t be putting his chequebook away any time soon as he pursues Calian’s stated goal of growing revenues at least 10 per cent annually.  

“We’re not slowing down, for sure,” he said. “We have a lot of liquidity.”