Swedish design house Syntronic acquires DragonWave’s Kanata operations

A Swedish engineering design house that develops and services products for customers in the automotive, medtech, industrial and telecommunications sectors has acquired DragonWave’s Ottawa operations in a bid to bolster its Kanata office.

Syntronic announced this week it’s adding about two dozen former DragonWave employees in the National Capital Region to the Stockholm-based firm’s growing North American operations in Kanata. Terms of the deal were not disclosed.

Syntronic opened its Ottawa office eight years ago. Since then, the company has expanded to more than 420 employees who now work out of three separate locations in Kanata. The newest is the former DragonWave office at 362 Terry Fox Dr., just down the road from Syntronic’s North American headquarters at 340 Terry Fox.

It’s the first-ever acquisition for the Swedish firm, which was founded in 1983 and has more than 1,500 employees in eight countries.

“I think it says a lot about their commitment to Canada and the potential that they see in Canada as a key place for growing R&D services and repair and after-market services as well,” says Darrell Wellington, Syntronic’s Kanata-based senior vice- president.

“It’s been tough to hire the talent because a lot of people are trying to do that – which is why this was such a good acquisition for us.”

While Syntronic has hired more than 100 workers in Ottawa over the past 18 months, it still has more than 150 R&D positions that remain unfilled as the company struggles to find skilled talent in today’s red-hot tech market.

Bringing DragonWave’s employees into the fold will help the firm quickly address that shortage, Wellington says.

“It’s been tough to hire the talent because a lot of people are trying to do that – which is why this was such a good acquisition for us,” he explains.

Syntronic’s acquisition of DragonWave’s Canadian operations cements an already strong connection between the two companies.

The Swedish firm has been a longtime supplier of products and services to DragonWave and other enterprises owned by DragonWave’s parent company, Dallas-based COMSovereign. Over the years, a number of high-ranking DragonWave employees have moved on to senior positions at Syntronic Canada, including VP of engineering Ingrid Mag, who spent 17 years at DragonWave – including three years as VP of product development – ​​before assuming her current role .

“A lot of our people over the years have moved to Syntronic and they liked being there and it was sort of a natural fit for us,” says DragonWave’s Ottawa-based VP of operations Dave Farrar, who initiated the M&A talks between the two firms .

Backhaul products

The deal marks the end of the line for DragonWave in Canada, closing the book on what was once one of Ottawa’s most prominent tech firms.

The company that specializes in microwave backhaul products that connect cellphone towers to service providers’ wireless networks was a publicly traded firm with more than $150 million in annual revenues in 2015.

But its revenues plunged to less than $40 million within two years after Nokia – which historically provided a significant portion of DragonWave’s revenue as an original equipment manufacturer sales channel – acquired DragonWave competitor Alcatel-Lucent.

The firm was delisted from the Toronto Stock Exchange in 2017. Later that year, DragonWave was acquired by Arizona-based Transform-X, which itself was later aborbed by COMSovereign Holding Corp., a developer of advanced communications systems that trades on the Nasdaq exchange .

Today, DragonWave’s customers include Bell, Rogers and Telus, as well as global telecom providers such as Britain’s Vodafone. Its US operations will remain under COMSovereign’s control.

Farrar and Wellington say they expect the two companies to continue to work closely together to build out DragonWave’s existing product line. Wellington also sees opportunities to tap into DragonWave’s expertise in manufacturing and repairing existing telecom components, services that Syntronic currently doesn’t provide in Canada.

“This helps us do that with an existing customer base, and then we can add a bunch of new customers in North America with that team being the base,” he says.

Meanwhile, Syntronic, which opened a design house in Montreal last year, continues to grow its Canadian operations at a brisk pace.

The company expects to open an office in the Greater Toronto Area shortly and plans to keep adding to its Kanata footprint, Wellington says, noting that demand for the organization’s R&D and design services has skyrocketed during the pandemic.

“A lot of tech companies, especially in telecom and even automotive and industrial, have a lot of pressure to get new products on their roadmaps and in some cases their engineering teams might not be performing as efficiently as they used to because many people are working from home,” he explains.

“We intend to keep (hiring) … and even speed it up if we can.”