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Report on Business Vancouver software firm PDFTron raises $71-million to fund growth

A Vancouver software company that has quietly emerged as a leading innovator in the digital document creation business has raised US$71-million from Boston private equity firm Silversmith Capital Partners to fund its growth.

PDFTron Systems Inc., with just 46 employees and between US$10-million and US$20-million in annual revenues, is little-known even in its hometown. Co-founders Ivan Nincic, the chief technology officer, and chief executive Catherine Andersz, both Eastern European immigrants who met at the University of British Columbia, only hired their first marketing employee last year.

Silversmith managing partner Jim Quagliaroli said in an interview PDFTron “has long been on our radar [as] the gold standard technology platform" in its market. He called the founders “domain experts in their field … who have build a great software company in a thoughtful and prudent way.”

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Despite its low profile, PDFTron has emerged as a leading innovator globally in the portable document format (PDF) business, providing software tools that organizations can use to embed PDF functionality in their own applications. PDFTron’s tools are used in such popular digital offerings as DocuSign and AutoCAD, while the U.S. Patent and Trademark Office uses its technology to review patent applications and the company counts hundreds of other blue-chip companies as customers. In recent years, it has beaten rivals including Adobe and Foxit to market with product innovations such as the ability for users to render documents directly in their internet browsers without needing plug-ins or taxing servers. Its free mobile PDF reading app Xodo has two million monthly active users and a higher user rating in the Google Play app store than Foxit and similar products from Adobe and Google.

The company was borne out of Mr. Nincic’s frustration in 2002 when was working for a biotech startup, two years after graduating from University of British Columbia with a computer science degree. His task was to find a PDF software tool library his company could use to generate documents. His only option was to use Adobe’s expensive and limited software development kit, or create his own. He chose the latter, but his bosses weren’t interested, so he struck out on his own with PDFTron. His product found customers quickly (Ms. Andersz joined in 2003 initially to help with sales) but they were more interested in using PDFTron’s software tools into their own products, so the company shifted to licensing out their underlying technology to customers.

PDFTron has never previously raised outside capital and was profitable from the outset, steadily growing revenues by about 30 per cent to 40 per cent per year. It started to attract investor interest when it appeared on Deloitte’s list of 500 fastest-growing technology, media and telecommunications companies in 2016.

“We had enough interest but ultimately wanted to make sure we were in the drivers’ seat to make the right decision for the company,” Ms. Andersz said. “We basically feel like we’re still just scratching the surface in terms of what is the potential of the company,” she said, adding the company plans to expand both through organic sales growth and through mergers and acquisitions. “We thought it would be great to get a partner to help us take on that next stage of growth.”

The company declined to disclose financial terms, though Mr. Quagliaroli said Silversmith had acquired a majority interest in PDFTron and had structured the deal “as a partnership” with the co-founders. Deloitte acted as PDFTron’s financial adviser.

Mr. Quagliaroli added his firm has set aside “significant additional capital” to invest further in PDFTron.

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