OTTAWA - Wi-LAN Inc. announced in a press release that its Board of Directors has approved a plan to transform its business into a growth-oriented diversified holding company by acquiring businesses that will operate alongside the Company’s intellectual property licensing business. As part of this transformation, WiLAN will:
1. Change its name to Quarterhill Inc. (“Quarterhill”) on or about June 1, 2017.
2. Effective immediately, implement the following management changes: Paul McCarten, Chairman of the Board of Directors will become Independent Lead Director. James Skippen, President & CEO, will become Executive Chairman. Shaun McEwan, CFO, will become Interim CEO. Steve Thompson, VP Finance will become Interim CFO. The Board of Directors has begun the search for a full-time CEO.
Quarterhill’s growth strategy will focus on acquiring technology companies in the Industrial Internet of Things (“IIoT”) segment across multiple verticals. The acquisition strategy will target companies with a broad range of products and services that capture, analyze and interpret data, and that have strong financial performance, excellent management teams, strong intellectual property underpinnings and significant opportunities to develop long-term recurring and growing revenue streams. The acquired businesses will operate independently as subsidiaries of Quarterhill. WiLAN will continue as a key subsidiary of Quarterhill focusing on patent licensing.
“Over the past several years we have considered multiple options for how to best leverage our capital to grow the business and increase shareholder value,” said James Skippen, Executive Chairman of WiLAN. “This strategy provides an ideal opportunity for us to diversify and inject new growth into the business, while addressing the “lumpy” financial performance that has come to be associated with stand-alone patent licensing businesses.
Because the environment for patent licensing companies has changed so much over the past decade, we have concluded that patent licensing as a stand-alone business will not meet our long-term objectives as a public company. However, the knowledge and experience we have gained as a leader in the patent licensing industry are directly applicable to identifying promising technology businesses with a focus on the IIoT segment. We will be looking for opportunities to expand our Board and senior management team with additional M&A and IIoT experience.
“WiLAN has a very strong established brand in the intellectual property licensing industry, which we will continue to build-on. Following the change of its name to Quarterhill, WiLAN will continue the intellectual property licensing business as a subsidiary of Quarterhill. For the year ended December 31, 2016, WiLAN generated revenues of $92.9 million, earnings before interest, taxes, depreciation and amortization of $53.7 million and cash from operations of $36.8 million. The future focus will be on generating positive cash flow and consistent performance from the patent business.
“In my new role as Executive Chairman I will oversee the strategic direction and chair the Board of Quarterhill. I will also oversee operations in the patent licensing part of the business on a temporary basis while we seek a permanent leader of this important part of our business. It is expected that even after we appoint a permanent leader of the patent licensing business, I will continue to assist on a part-time basis with patent licensing operations. This fits with my own personal plans and allows an evolution in the leadership of the Company.”
WiLAN has a strong balance sheet to support this growth strategy and has no intention of changing its dividend policy. At December 31, 2016, the Company had $107.7 million (CDN $143.1 million) in cash and cash equivalents and no debt.