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Ownership of a world-renowned Canadian aviation services company, Mxi Technologies Ltd., was formally transferred on Jan. 18 to a Swedish global equity firm, EQT Partners, after what has been described to Skies as a “very friendly” takeover.
The transfer, which merges Mxi into another EQT holding, Industrial and Financial Systems (IFS), was ironed out during a visit to Mxi’s Ottawa base in late December by Graham Grose, who heads up the IFS Aerospace and Defence Centre of Excellence.
Founded in 1996 by four software executives, Mxi (which stands for “Maintenance by information”) immediately began developing a management program prototyped as Flightworks but rebadged as Maintenix.
Commercial release followed in 1998 and the next 18 years saw Mxi build a “blue chip” roster of defence suppliers to its clientele, making Maintenix “the platform of choice for the world’s most advanced next-generation jet fighters.”
It continued to expand and evolve, adding original equipment manufacturers, airlines and third-party maintenance, repair and overhaul (MRO) companies to its list, which includes the Canadian Department of National Defence.
By 2013, Maintenix had become the first MRO software solution to offer touch screen mobile capabilities for line maintenance and 2015 brought “unprecedented growth” in key markets. In late 2015, Mxi moved into new headquarters in Ottawa and opened new U.S. offices in Dallas-Fort Worth to meet growing demand for Maintenix in the Americas.
It was an appealing target for EQT, a private equity group of 20 funds with €30 billion in capital, which plans to expand aggressively in North America.
Grose said in an interview before the deal formally closed that the “very friendly” acquisition of Mxi is part of a concerted effort to “balance off our market penetration” of military and civil aviation. The “pendulum had been much more on the defence side” during his more than 16 years with IFS.
“A typical software company goes where the revenue is and we were very successful,” he told Skies. “Then, probably two or three years back, we had a big breakthrough with Emirates Airlines and that sort of tied in with changing market metrics, analysis and forecasts. . . . We wanted to leverage that, so we started putting a lot of emphasis on commercial aviation – with some success.”
Grose said the Mxi acquisition means IFS, acquired by EQT little more than a year ago, will add a business unit of some 300 employees “dedicated to the provision of aerospace and defence software” globally.
“That is our way forward. . . . It is a specialist and fast-growing market which a company like Mxi has been very successful in and its product set is very well attuned to it.”
While the acquisition means some senior Mxi executives are leaving, Grose said it will be “business as normal” because there is “a very nice cultural and business fit” with IFS.
“We will continue to run the Mxi matrix as a ‘best of breed’ product set and we’ll also be working to integrate that more closely with IFS for any customers who would like a wider end-to-end solution,” he said. “But some of their customers want to run with the ‘best of breed’ and we will continue to invest in that solution. . . .
“It’s just a match made in heaven in terms of exploiting their footprint globally and we intend to invest in certain big regions where you’d expect to see growth in commercial and defence MROs, such as the Middle East and Asia-Pacific. I’ve already got people there who are going to be consolidated into the new business unit, plus additional staff.”
Scott Helmer, the former chief financial and operating officer at Mxi, has been named managing director and chief executive officer of the combined unit, which Grose said will be “positioned at the top level of IFS.”