LSIF funds see another win as Microsoft acquires Opalis

McQueen%2C%20Mark44X64.jpgPosted by Mark McQueen, CEO Wellington Financial LP
One of the funnier (irony alert) things I heard this year was that “there is too much venture capital” (see prior post This is Roger Martin, reporting from Mars Nov 25-08), which as a concept was neatly packaged together with the proposition that the Retail Venture Capital industry doesn’t know how to invest successfully.
Wrong, wrong, wrong.
If only the Ontario government looked at the successes of Retail Venture Capital, and ignored the chirping in their ears from jealous VCs, they would never have cancelled the Labour-sponsored Fund program. Microsoft’s recent acquisition of Opalis Software is just the latest example of a Canadian management team with VC backing building a company to the stage where the world’s largest software company just had to own it.
This isn’t just some accretive tuckunder. Microsoft can’t be bothered with those. This is, by all accounts, an important initiative for the folks in Redmond:
"I believe this acquisition is a pivotal piece to deliver on our dynamic datacenter initiative, which I’ve spoken about before on this blog. This deal brings together the deep datacenter automation expertise of Opalis with the integrated physical and virtualized datacenter management capabilities of Microsoft System Center. I believe Opalis’ software together with the System Center suite will improve the efficiency of IT staff and operations, and customers will gain greater process consistency. Opalis’ software captures the IT processes, in a documented and repeatable way, which can be run over and over again. These capabilities will be added to Microsoft System Center to help customers automate complex IT processes, increase cost savings and shorten timeframes for IT service delivery across physical, virtual and cloud computing environments."
As VC investing in Canada goes, investors saw a return on capital of just under 3x, which is pretty great in today’s economic environment.

Congrats to VenGrowth (Peter Carrescia), Sierra Ventures (Mark Fernandes) and BDC Venture Capital (Roger Wilson). VG and BDC did the first two rounds of funding, while Sierra led rounds 2 and 3.
Congrats as well to Opalis management, without whom there’d be zip to celebrate. This transaction is the very impressive feat that you articulated was possible just a short year ago. Considering the M&A market largely shut down between October and April, this is all the more worthy of celebration! Kudos to CEO Todd DeLaughter and CFO Greg Twinney, For CTO Charles Crouchman, this is back-to-back successful outcomes after the acquisition of Cybermation a few years ago.
Hopefully you’ll all stick around the Canadian venture scene and do it again.

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