MPact » Industry
Thinking Beyond Your Backyard?
By John Muffolini, National Leader, Technology, Media & Telecommunications
At some point in their journey, growing Canadian technology businesses will want to look at international opportunities.
- Expanding internationally can involve significant levels of red tape that can require local expert to resolve.
- You don’t have to be a large corporation to gain access to these international resources. MNP can partner within our Praxity Alliance to deliver the local support.
- Pandemic travel restriction means having access to the right network connections is especially important.
Whether it’s making strategic acquisitions or building a team in a new city, expanding internationally isn’t easy. Canadian companies realize they need go move beyond Canadian borders if they're going to be successful and have a global footprint. Expanding or acquiring in these countries requires getting past red tape which companies might not initially think about.
Historically, the U.S. has offered easiest transition for Canadian companies expanding abroad. But companies are now looking at burgeoning economies in Europe, South America and Asia. These all sit among the top 20 tech ecosystems, according to a recent report from Startup Blink, which ranks 1,000 cities in 100 countries based on several factors ranking their business environment.
The right people in the right context
Consider the case of Hamilton Thorne, an MNP client which develops solutions for Assisted Reproductive Technologies (ART), research, and cell biology markets. The company, which is publicly traded in Canada but headquartered in Massachusetts, made acquisitions in Germany-based Gynemed and England-based Planer, in 2017 and 2019 respectively — two different geographies that required their own sets of complex due diligence.
In this multi-national situation, having the right partner with expertise and connections was key to success. We knew we needed to contact professionals in those countries to best serve our clients. That obviously delivered more value than me trying to find out all the German requirements.
Through MNP's Praxity Alliance, MNP connected Hamilton Thorne to Mazar offices, a Paris-based international audit, accounting and consulting group, to help the company navigate the unique international tax requirements. While it sounds trivial, these processes can make or break an acquisition.
Mazars was initially engaged to assist in the due diligence review providing Hamilton Throne with the requisite information in assessing whether to acquire the companies. We also helped connect them to the appropriate local tax professionals for tax structure planning advice and providing tax considerations on related transactions. At the same time, MNP provided the Canadian perspective and helped Hamilton Thorne as a publicly-traded Canadian company.
MNP is part of the Praxity Alliance, a global cohort of more than 65 independent audit and consultancy firms in over 100 countries. With nearly 52,000 professionals in over 700 offices, each member of the alliance offers an important local context wherever they are. Each Praxity firm must adhere to reporting standards while remaining wholly independent.
An instant “in” within a new market
As COVID-19 continues to restrict travel and CEO’s abilities to visit potential acquisitions abroad, network connections are especially important. With MNP’s ability to tune into the local markets, Canadian companies can get the expertise without having to do the work to find a brand-new partner.
Ultimately, our clients may not actually be able to go to an acquisition target themselves. But they still get the benefit of an advisor in that local region, in the same time zones, who speaks the same language, and shares the same customs. And you don’t have to be part of the Fortune 1000 to benefit.