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PwC Up front | Issue 5 | Harnessing technology

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36 Up front Summer 2014 The challenge When Paul Loucks joined what is now Halogen Software Inc. in 2000, he quickly understood what the company needed to put it on a growth trajectory. Named President later that year, he launched a product reinvention at the Ottawa-based software consultancy and developer that morphed into its current cloud-based talent management solutions. Loucks, who became CEO in 2006, led the development of software that helps organizations manage everything from employee performance appraisals to recruitment and succession planning. In 2013, Halogen had reached a significant size for a Canadian software company, with annual revenue in the $40-million to $50-million range and a worldwide clientele. But it needed capital to compete in the global talent management space. Timing was everything. Halogen targets mid-market companies – those with between 100 and 10,000 employees. With some 300,000 The strategy As Halogen's leader, Loucks had always aimed to grab investors' attention. Going after a big potential market was key and so was recurring revenue from many customers. Because Halogen sells most of its products via annual subscription, its revenue is predictable, with more than 90 per cent visible early in the fiscal year. Also, the company's top five clients represent less than six per cent of total sales. With the systems, people and processes in place, 350-employee Halogen "really just needed to look at market timing" for the IPO, Loucks recalls. The company would be testing the market to see if there was an appetite for a Canadian tech flotation. "I don't know if anybody really knows when it's the right time to go public," Loucks says. "There's always that risk between the time you file your IPO and when you're actually able to complete it that the capital markets [won't] remain strong," he adds. "You always have to have some good luck." businesses in that category worldwide, Loucks knew he had a $15-billion market. Tapping it at an early stage was crucial. "We know that less than 10 per cent of those companies have talent management software solutions in place," says Loucks, who was previously Founder and President of Ottawa software developer NeoDyne Consulting Ltd., which Compaq Canada Corp. acquired in 1997. "We wanted growth capital available to make sure we go out there and capture that market." That led to another bold move last May, when Halogen launched a $55-million initial public offering on the Toronto Stock Exchange – the first Canadian technology IPO filing to reach the TSX in 18 months. Public success By ending Canada's tech IPO drought in May 2013, talent management specialist Halogen Software secured $55-million to fuel its global ambitions By Diane Jermyn Challenges | Growth

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