QNX Software, a privately-held company that has been working away in the nation's capital for 23 years, said Wednesday it has accepted a buyout offer from U.S. firm Harman International Industries Inc.Washington-based Harman, a well-known maker of high-end audio and stereo equipment under such brands as Harman Kardon and JBL, will purchase QNX for US$138 million.
In the last fiscal year Harman achieved revenues of US$2.7 billion. By comparison, QNX's annual sales amount to about $26 million.
Harman's interest in QNX lies with the Ottawa firm's flagship Neutrino realtime operating system, a telematics system for cars and other applications.
That makes QNX complimentary to Harman's consumer division, which sells its high-end audio systems through automakers such as DaimlerChrysler and General Motors.
Telematics systems are a combination of computers and telecommunications that provide drivers with everything from real-time navigation assistance to reminders about when vehicle maintenance is required. It's quickly growing into a multibillion-dollar industry.
The company was founded 23 years ago by CEO Dan Dodge and chairman Gordon Bell while they were still working as engineers at Bell Northern Research. In the years since, the two men have worked to build the company without the aid of venture capital.
In a late day conference call, Mr. Dodge stressed that QNX will not be swallowed up and lost within Harman. Under the terms of Wednesday's deal, QNX will continue to operate under the leadership of its founders with its existing staff and facilities as a separate division under the Harman umbrella. QNX's 240 staff, including 180 in Ottawa, will be offered retention bonuses.
Accepting a buyout offer was a means to build the necessary momentum and acquire the financial resources to push its products into the market against big players such as Microsoft Corp. faster than was possible by going the route of a public offering, Mr. Dodge said.
The two companies hope to make QNX's Neutrino product the "de facto" standard for the telematics industry. That includes applications, not only in automotive, but in networking, medical instrumentation, and industrial control markets as well.
"My vision for QNX remains steadfast. We will remain the top brand for OS reliability, the proving ground for innovation, and a fiercely customer-centric organization," Mr. Dodge said Wednesday.
Harman CEO Bernard Girod added that, "We are excited to contribute to QNX's ongoing growth and success, at a time when the need - and demand - for its operating system technology is accelerating worldwide, from North America to Europe to the Pacific Rim."
- Wed, Oct 27, 2004 2:00 PM EST Ottawa Business Journal