IC Group seeks growth with acquisition run

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This article was published 04/06/2024 (720 days ago), so information in it may no longer be current.

IC Group, a private Winnipeg marketing technology company with more than 25 years in business, has staked a claim to a sophisticated niche in the digital marketing arena, attracting high-profile clients over time like PepsiCo Inc., Nike Inc. and the Wendy’s fast food restaurant chain.

However, like so many other markets, the COVID-19 pandemic disrupted business dynamics for IC Group’s space. At the same time, the technology it deploys to run campaigns like contests or loyalty programs has become more accessible and less costly.

Marc Caron, one of the partners of the company and its chief operating officer (and chief information and security officer), said that tech development and competition has brought pricing down.

But with a high skilled staff of about 80, mostly based in Winnipeg, Caron said the company needs to keep those well-paid high achievers happy and felt it needed to diversify.

Since last fall, it’s made a couple of small acquisitions — including one in France that has opened the European market for IC Group — with another pending. However, as a private company (four senior managers and one outside investor form the ownership group) that has operated debt-free for many years, it needs access to capital to keep growing.

It is currently in the final stages of a reverse takeover of Toronto-based capital pool company Cuspis Capital II (listed on the TSX), giving IC Group the opportunity to raise additional capital in the public markets to pursue other acquisitions.

Caron said while the process is time consuming and expensive, but it’s the kind of risk that can lead to significant rewards. “The primary rationale for going public is to have the ability to raise money to fund project you need to fund quickly.”

The multi-stage Cuspis process will include the closing of another as-yet undisclosed acquisition.

The arrangement also “contemplates” that, as a condition of closing of the transaction, the parties will complete a private placement of equity securities for gross proceeds of a minimum of $3 million.

“Ultimately, the process is going to help us grow and double or triple the size of the company,” said Caron.

Late last year, IC Group acquired technology assets to become one of four players in Canada offering two-factor authentication — a service that’s becoming omnipresent in digital banking and accessing remote private networks.

Earlier this year, it acquired a small French company called Pickaw (Pick a Winner). While it’s only a three-person company, Caron said it has efficiencies and technologies IC Group did not, as well as a unique client base, providing all sorts of synergies for its North American operations.

“It’s a diversification play on a few different levels.”

For instance, Pickaw runs small programs on all the major social media platforms, whereas over the years, IC Group has produced all sorts of special event programs specifically on X (formerly Twitter).

Alex Josephson, New York-based vice-president and global head of brand strategy and creative for advertisers for X, said he’s been working with IC Group for about a decade.

“IC Group is really adept at building marketing technology services and solutions on top of the X platform,” he said. “These are solutions that are best in class in the marketplace.”

For instance, Josephson said IC Group has pioneered a scheduled notification feature X advertisers have deployed very successfully, as well as a profile analyzer experience.

He said the changing consumer habits of the younger Gen Z market who have access to many new technology platforms pose major challenges for brands and IC Group has helped create successful solutions. “It really take a lot for brands to break through and capture attention on a consistent basis and do it in an authentic way.”

Caron is hoping recent developments at IC Group will give the company’s market presence a boost and allow it to keep helping advertisers in different ways and different markets to engage that hard-to-please Gen Z consumer for many more years.

martin.cash@freepress.mb.ca