Beverly, MA-based Hamilton Thorne, which makes laser equipment used in stem-cell research labs and fertility clinics, has raised $2.2 million in a private stock placement and debt conversion deal, according to an announcement released last week. A the same time, the company, which recently completed a merger with Ottawa, Ontario-based Calotto Capital, will soon be listed on the TSX Venture Exchange, a Canadian stock exchanged headquartered in Calgary, Alberta. Meg Spencer, Hamilton Thorne’s CEO, said in a press release that joining the TSX will give the company—which had previously raised about $13 million in venture backing from Brook Venture Partners and StarLake Capital—access to “a larger pool of capital to further advance our commercialization strategy.”

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Tech manufacturing exports from Washington state grew for the sixth straight year in 2008, up to $3.5 billion (15th out of 50 states), according to a TechAmerica Foundation report highlighted today by the Washington Technology Industry Association (WTIA). Washington ranked fifth nationwide in consumer electronics exports, which totaled $320 million. The top three tech export destinations for the state were Canada, Taiwan, and the Netherlands. The report did not include software exports.

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Toronto-based iloverewards.com, which runs an online product catalog that offers corporate employees rewards as performance incentives, has closed a Series B venture funding round led by GrandBanks Capital of Newton Center, MA. There are conflicting reports about the amount of the round: a press release from iloverewards.com put it at $6.9 million, while a GrandBanks e-mail newsletter circulated this morning put it at $5.7 million. Existing investors JLA Ventures and Laurence Capital joined the round. Investing in Canadian technology startups is something of a specialty for GrandBanks—this is the firm’s fifth such investment and its sixth transaction in Canada overall.

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In a major acquisition that expands its reach across North America, Norwell, MA-based waste management company Clean Harbors (NYSE: CLH) said today that it has agreed to acquire Edmonton, Alberta-based Eveready Inc. The Canadian firm provides maintenance, lodging, and exploration services to a range of companies in the oil and gas, chemicals, paper, manufacturing, and power generation businesses. Clean Harbors said it will pay $387 million for Eveready using a combination of cash, stock, and assumed debt.

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Bingen, WA-based Insitu, a developer of unmanned aircraft systems, announced today it has received a one-year, $30 million contract from the Canadian government to provide technologies to support Canadian forces’ operations in Afghanistan. The contract, which includes two additional one-year options, specifically calls for small unmanned aerial vehicles for intelligence, surveillance, and reconnaissance. Insitu was acquired by Boeing (NYSE: BA) for about $400 million last summer.

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Burlington, MA-based Nuance Communications is wrapping up its long and sometimes contentious crusade to acquire Zi, a Canadian competitor in the market for text messaging software, which has agreed to Nuance’s $35 million buyout offer.

The deal, announced today, provides shareholders of Calgary-based Zi (NASDAQ:ZICA) with 34 cents in cash and 0.4 shares of Nuance (NASDAQ:NUAN) stock for every share of Zi stock. That values the company at 69 cents per share—or a 73-percent premium over the closing price of the stock on its last day of trading before Nuance began its tender offer to acquire Zi shares on November 25. (Hindsight is 20-20, but the Nuance offer that Zi rejected back in August was worth $40 million, or 80 cents per share.)

Zi’s board has unanimously accepted the offer; now it needs to be approved by Zi’s shareholders, at a meeting scheduled for April. Zi offers Nuance its line of products that speed entry of text messages, correct typos, among other features. The acquisition would also eliminate a competitor to Nuance’s speech-to-text technology.

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After its last bid to acquire Calgary, Alberta-based Zi Corporation (NASDAQ: ZICA) for $0.40 per share expired on Friday, Burlington, MA-based speech technology giant Nuance Communications (NASDAQ: NUAN) now says Zi has until February 13 to respond to its offer. The board at Zi, which makes software for quickly typing text into mobile devices that competes with Nuance’s speech-to-text systems, has repeatedly rejected Nuance’s takeover offers, as we reported in August and November. In its Friday announcement, Nuance emphasized that its current offer represented a 25 percent premium over Zi’s closing price on August 13, prior to Nuance’s first acquisition bid—but the offer is actually below Zi’s current market price (the company was trading at around $0.41 per share this morning). After Zi rejected Nuance’s August bid, Nuance filed a patent infringement lawsuit against the Canadian firm.

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Waltham, MA-based Xkoto, a database virtualization company that relocated from Ontario, Canada, to Massachusetts in 2007, announced today that it has raised $3 million from existing investors GrandBanks Capital and GrowthWorks Canadian Fund. The infusion brings the four-year-old company’s total venture pot to $13 million. Xkoto was named InformationWeek’s “Startup of the Year” in 2008 and reports a major expansion in its customer base and revenue for the year.

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Seattle-based Pelago, maker of the Whrrl mobile-networking application, announced it has partnered with Norwich, VT-based Maponics to provide the location-aware service to customers in more than 50,000 neighborhoods in 2,000 cities across the U.S. and Canada. Financial terms of the deal were not disclosed.

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Burnaby, BC-based NxtGen Emission Controls announced today it has closed a $15.4 million Series B round, led by Denver, CO-based Altira Group. Other investors included Itochu, an undisclosed Japanese auto maker, and return investors Yaletown Venture Partners, GrowthWorks Capital, BC Advantage Funds, and Polygon Financial Investments. NxtGen Emission specializes in “syngas” technology for reducing emissions and optimizing combustion of diesel, biodiesel, natural gas, and gasoline.

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Yaletown Venture Partners, a Vancouver, BC-based venture firm, said today it has raised $65 million in the initial closing of its second fund, which it estimates will grow into a $100 million fund over the next 12 months. The new pot of money will be used for cleantech and information technology investing in Western Canada, and some select cleantech deals in the U.S. Pacific Northwest and across other parts of Canada, the company said. Yaletown noted that it raised its first fund, worth $42 million, during “challenging market conditions” of 2003.

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Waltham, MA-based Commonwealth Capital Partners is the lead investor in a $5 million Series A venture round for Tungle, a maker of free Web-based calendar groupware, the Montreal-based startup announced today. Existing investors JLA Ventures and Desjardins Venture Capital also contributed to the round, which will be used to—you guessed it—”accelerate the company’s marketing and engineering activities.”

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Microsoft officially opened its Vancouver, BC-area development center today. The company announced the center, which is located in Richmond, BC, in July of last year. It is expected to add about 300 jobs to the region. Software developers there will work on products that include Windows, Windows Mobile, Office, and Xbox 360.

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Another big acquisition has come to town. Bellevue, WA-based software firm Captaris said today it is being acquired by Open Text, a business-software company based in Waterloo, Ontario. The deal is worth about $131 million, and is expected to close by the end of the year. The purchase, for $4.80 a share, represents a 31 percent increase over yesterday’s closing stock price of $3.67.

Founded in 1982, Captaris (NASDAQ: CAPA) makes software to manage and work with documents and business data, such as products that convert paper documents to digital files and automate the flow of content. In March, the company rejected a bid from private-equity firm Vector Capital.

It’s a pretty big deal, but I suspect Captaris was looking for something even bigger, given how well-established it is in the market. “After a thorough evaluation of strategic alternatives, the Captaris Board of Directors believes that today’s announcement provides value for our shareholders and the certainty of cash,” said David Anastasi, president and CEO of Captaris, in a statement. “Together with our shareholders, our customers, partners and employees will benefit as Captaris combines with Open Text, a market leader with the financial strength to take our company to the next stage in its evolution.”

The companies didn’t say in their statement what will happen to Captaris’s 400-odd employees.

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Toronto, Ontario-based Q9 Networks, a data center operator, said today that it has agreed to be acquired by CDC Acquisition Corp., an affiliate of ABRY Partners, a Boston private equity firm focused on media and communications investments. The purchase price of approximately $361 million in Canadian dollars, or $17.05 per share, represents a 38 percent premium over Q9’s 30-day trading average on the Toronto Stock Exchange.

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Zi Corporation (NASDAQ: ZICA), a struggling Calgary, Alberta-based company whose software is designed to speed text entry on mobile devices, today rejected a takeover offer from Burlington, MA-based speech recognition giant Nuance Communications (NASDAQ: NUAN). Nuance reacted angrily, calling the rejection “perplexing and inappropriate” given Zi’s financial condition.

Last Thursday—the same day Zi announced widening financial losses for the second quarter of 2008—Nuance pounced, saying in a letter to Zi’s board of directors that the time for a sale of the company had come. Nuance noted that Zi was hemorrhaging cash and that low stock trading volumes had put the company in danger of being delisted by the NASDAQ exchange. “We believe that a negotiated transaction with Nuance would be the best way for Zi Corporation to maximize shareholder value, and in particular, to offer substantially superior value…relative to any available alternatives,” Nuance CEO Paul Ricci said in a the letter, which Nuance released to the media.

Nuance said it would offer US $0.80 per share in cash, or approximately $40 million, for Zi, roughly 150 percent above last Wednesday’s closing price of $0.33. After the announcement caused Zi’s stock price to more than double by the close of trading on Friday, however, Nuance’s offer represented a premium of only 20 percent.

This morning Zi turned down that offer. In a release today, the company said that it had concluded in consultation with financial advisors that Nuance’s offer wasn’t high enough. “The Nuance proposal does not recognize the full value of Zi,” the company says.

In another press release issued today just hours after Zi’s announcement, Nuance fired back. Ricci called Zi’s refusal to negotiate “perplexing and inappropriate given the compelling premium our proposal represents to Zi’s market price and the liquidity opportunity it will create, especially in light of the disappointing financial performance and cash outlook Zi reported last week.” He also suggested that the board’s resistance to the Nuance offer is inconsistent with its fiduciary duties to shareholders.

Ricci did not raise Nuance’s offer, saying that Zi’s board had so far failed to provide information that would support an increased bid. “However, Nuance would welcome, and believes it is incumbent upon Zi to provide, any additional information that supports the Zi board’s contention that Nuance’s proposal does not fully value Zi Corporation,” Ricci said.

Zi makes several types of text-entry software for mobile devices, including one program that automatically corrects typos for text entered via keypads, another that offers predicted word completions based on the first few letters, and a third that’s used in pen-based devices to convert letters, shapes, and punctuation into digital characters. Last week the company reported that second-quarter revenues had declined to $2.7 million, compared to $3.5 million for the same period in 2007. Losses for the quarter totaled $1.5 million, or $0.03 per share, compared to $1.2 million for the second quarter of 2007.

Nuance—which is known for its aggressive business tactics—is currently embroiled in a lawsuit with Cambridge, MA-based Vlingo over speech recognition patents that Nuance says Vlingo is infringing.

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U.S. residents have access to a growing number of online video portals, such as Movielink, Cinemanow, and Apple’s iTunes store, where they can buy or rent movies for download on the same day they’re available in retail stores on DVD. Thanks to the complexities of international licensing, however, most of these services aren’t accessible to people outside the United States. But yesterday Bell Canada, with help from Newton, MA-based video software company ExtendMedia, launched the Bell Video Store—the first site in Canada to offer same-day movie downloads, and the first telecommunications company anywhere to do so.

“Bell is farther ahead than a lot of telcos down here,” says Keith Kocho, president and founder of ExtendMedia, whose “OpenCase” software runs the video store’s back end—pulling in content, presenting an online catalog, handling customer transactions, encoding the content for download, and then playing it on customers’ computers. “But I think you’ll see more of them down here [offering Internet video-on-demand] too.”

In fact, ExtendMedia’s whole business is to provide hosted or turnkey video delivery systems to companies that want to get into the Internet video market, and Kocho says the company expects to announce more partnerships similar to the Bell Canada deal soon. Unlike many competing platforms—including software from local competitors like Maven and Brightcove—OpenCase is agnostic when it comes to business models and delivery methods, according to Kocho. It can handle download-to-own movies, time-limited rentals, and free ad-supported downloads (it’s been handling the latter for NBC Direct since this winter). It can send movies to almost any type of computer or media player—including video iPods, Archos media players, and the Xbox 360. “We’re a little different from most other folks,” says Kocho. “Our service was purpose-built to let customers choose the business model they want.”

The Bell Canada deal isn’t surprising, given that ExtendMedia has production facilities in Toronto and previously assisted the company with its video-on-demand coverage of World Cup soccer matches. Moreover, Kocho himself is Canadian, and admits to subscribing to cable sports channels “mainly so I can watch the Maple Leafs fall on their swords every year.”

But “it’s an interesting time,” in Kocho’s words, and video-download options are only going to multiply over the coming months. “We have long maintained that the large service providers will have to start to give into the pressure created by services like iTunes and launch direct entertainment services over the Internet,” he says. “But a lot of the companies that wanted to follow that lead earlier found there were a lot of barriers: incompatible devices, low-quality viewing experiences, people’s unwillingness to pay for a service that was going to be bound to a particular computer. Slowly but surely, those things are breaking down. Bell is one of many companies that we expect to see come into the mainstream.”

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I’d like to explain what’s cool about Kalido, a Burlington, MA, software company spun off five years ago by Royal Dutch Shell, but let’s start with a story about beer.

Labatt Breweries is Canada’s largest beer producer, brewing 60 brands of ale and distributing them in stores, bars, and restaurants across the great North. Because Labatt has bought up so many regional brewers over the years, and because every province in Canada regulates the sale and taxation of alcohol differently, the company has inherited dozens of different sales databases and reporting systems, making it extremely difficult to figure out exactly which Canadians are drinking what kinds of beer.

Typically, big companies get a grip on their sales data, customer information, departmental budgets, and the like by buying a “data warehouse” where all of the most important information from lower-level transaction systems can be organized for fast retrieval; then they use “business intelligence” tools to transform the information in the data warehouse into charts and graphs that give historical, current, or predictive views. Labatt was deep into all of these technologies. It had enterprise resource planning software from Oracle, customer relationship management software from Seibel and SAP, data integration tools from Informatica, and business intelligence tools from Cognos. But when Labatt itself became part of Belgian beverage conglomerate InBev a few years ago—meaning that it would have to start feeding business performance data up the chain to managers in Europe—the company realized that its various divisions were still counting the same things different ways.

That’s when Labatt turned to Kalido, which is the product of a similar but even more severe crisis at Shell. During the 1990s, the petroleum giant acquired some 75 companies using 110 different reporting systems, according to Kalido CEO Bill Hewitt. “The guys in Beijing would call a brand of oil ‘A’ and the guys in Cincinatti would call the same product ‘B’, and the process of rationalizing the data every year was taking far too long,” says Hewitt. “So they built a data warehouse and generated reports off that—but the problem was that every time they wanted a different report or brought in a new company they’d have to rebuild the data warehouse, which would take months. Finally they ended up separating the rules that governed the data warehouse from the data itself. Instead of building a new warehouse, they built a business model”—a graphical representation of Shell’s business, with active links back to the raw data.

With this new interactive tool, the graphical model didn’t simply depict but actually controlled the way data was piped between the company’s low-level operational systems and its business intelligence software. So adding a new subsidiary’s data to the mix would be almost as simple as drawing a new box in the org chart and connecting it to the proper parent divisions. Other changes in the organization could be replicated in the model simply by dragging boxes around and redrawing the arrows between them (more details on that below). And not only that, but because the data was now tied to a flexible model, analysts could store snapshots of the model representing different points in time, then run the clock backward and forward to examine different what-if scenarios.

Back to Labatt. In 2005, the company hired Kalido to build a new data warehouse that would bring together data from 93 transaction systems databases holding 16 years’ worth of records on products, customers, suppliers, employees, and so on. A real-life test of the Kalido installation and its flexibility came almost as soon as it was completed, when Labatt acquired yet another brewery. Labatt’s field sales staff wanted to integrate the new company’s product information into the sales database right away, so they could see how Labatt’s new sales totals would look. But the company’s accountants didn’t want to integrate the new information until the end of the fiscal year, fearing it would mess up the books. “In a traditional data warehouse you’d never be able to have it both ways,” says Hewitt. “But because we have the ability to recreate a view at any point in time, the data warehouse managers could give the sales people the view they wanted and still wait until the end of the year to consolidate the financial information.”

Okay, you may have a hard time getting excited about a new data modeling tool that reconciles incompatibilities in a company’s database infrastructure and brings out the full potential of business intelligence software. And admittedly, developments in enterprise software can seem deathly dull to outsiders who aren’t enmeshed in the complexities of running a big business. But if you follow the larger world of software engineering, then you may appreciate the novelty and power of Kalido’s idea, which builds on more than a decade of R&D on graphical models that define and drive underlying data structures.

The linking of graphical models to actual software code and data is the core concept behind the Unified Modeling Language first developed in the early 1990s by Rational Software, which went on to be acquired by IBM and is now at the epicenter of Big Blue’s software development platforms business. Suffice it to say, business data modeling is an idea that’s picking up steam, and that’s likely to become more important as …Next Page »

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Virtualization of server resources—allowing corporate IT managers to consolidate workloads onto fewer machines—is the big technology wave sweeping the corporate data-center market. Waltham, MA-based Novell (NASDAQ: NOVL) is an important player in that market, but its products are focused around identity management (a legacy of the company’s original focus on server operating systems and directory services products), the Linux operating system (an area it entered with the acquisition of Ximian in 2003 and SUSE Linux in 2004), and workgroup collaboration tools (a focus bolstered by the company’s acquisition two weeks ago of Maynard, MA-based SiteScape). Now, eager to avoid being left behind in the virtualization race, Novell has acquired yet another company—Toronto-based PlateSpin, which makes workload management software for virtualized data centers.

The all-cash acquisition, which will cost Novell $205 million, is “a true milestone in Novell’s history” and “provides a critical piece in completing our commitment…to delivering the best IT management software for both physical and virtual environments,” Novel CEO Ron Hovsepian said in a telephone press conference this morning.

Stephen Pollack, CEO of PlateSpin, said the company offers three key technologies: a visual planning-and-analysis tool for managing data center resources, a workload management package that makes software jobs portable across virtual and physical servers, and a hardware appliance for disaster recovery with virtualized workloads. “IT executives consistently list optimizing, virtualizing, and controlling their heterogeneous IT environments as the core of what keeps them up at night,” Pollack said. “The reason I and the PlateSpin team are so excited about becoming part of Novell is that it already has a successful strategy in data center management, and now we can truly deliver the next-generation infrastructure for flexible data centers.”

Hovsepian said that with the PlateSpin acquisition Novell “will be in a unique position” to help customers manage and protect virtualized workloads, use resources more efficiently, cutting the cost of deploying new applications, and control the sprawl of applications that can run over virtualized systems.

Bringing in PlateSpin could help keep Novell competitive as a growing number of enterprise software companies offer either virtualization systems (including VMware, Microsoft, Oracle, Citrix, Virtual Iron, SWsoft, Qumranet) or software for managing workloads on virtualized systems (including Incipient, Vkernel, AutoVirt, GlassHouse, to name just a few local entrants). A venture-backed startup founded in 2003, PlateSpin has about 220 employees in the Toronto area. Its investors included Insight Venture Partners, OpenView Venture Partners, CastleHill Ventures, Covington Capital, Skylon Capital, and Four Quarters.

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Combine the folks who brought you the giant robot arm on the space shuttle with a company that makes miniature ceramic motors and what do you get? A brain surgery robot that works inside an MRI machine, of course.

Researchers at the University of Calgary in Alberta, with help from MacDonald, Dettwiler, and Associates (MDA), makers of the Canada arm that helps the space shuttle pluck satellites from orbit, have developed something called the neuroArm, an experimental robotic arm complete with scalpels for performing brain surgery. And Johnson Medtech, a Methuen, MA, subsidiary of Hong Kong’s Johnson Electric, is supplying the tiny ceramic motors that give the arm mobility, the company announced Wednesday.

What’s cool about the neuroArm is that a brain surgeon can stick it inside a magnetic resonance imaging (MRI) scanner and use its remote manipulators to operate while getting a real, live MRI picture of what’s going on. That gives surgeons better information about where to cut and where not to, and how to change their procedure as they go. The robot is also accurate to less than half the width of a human hair, more than 20 times the dexterity of a human hand, says the team who designed it. That means instead of operating on the brain as a whole organ, they can start to think about their surgeries nearer to the cellular level.

There aren’t many instruments that can be used in conjunction with an MRI, all because of that pesky M. Standard metal objects get pulled away by the strong magnets that produce the image, and anything that produces a magnetic field itself distorts the picture. So most of the robot is made of titanium or a plastic composite. That’s where Johnson Medtech comes in.

The company makes a piezo-ceramic motor that is unaffected by the magnets. “It’s basically a piece of ceramic crystal,” says Alan Feinstein, president of Nanomotion—one of the companies that makes up Johnson Medtech, an umbrella organization encompassing bits of several Johnson Electric subsidiaries. “The actual motor element is about the size of a stick of Trident chewing gum.”

This particular crystal is piezoelectric, meaning that when you apply an electrical field to it, it changes its shape. In the neuroArm, the piezo-ceramic motor is hit with 270 volts, and its bends and distorts, wriggling back and forth like an eel at a rate of about 40,000 oscillations per second. As it vibrates, it presses a tiny fingertip of ceramic against a ceramic ring, spinning it like you might spin a bicycle wheel with one finger. Six motors around a 150-millimeter-diameter ring provide plenty of torque for moving the robot arm around. Other parts have smaller set-ups; just one motor and a 40-millimeter ring move the robot’s “wrist.”

So (a), the fact that the motor is all ceramic means it’s immune to the MRI’s magnetic field. And (b), because the design uses a high voltage and low current (about 100 milliamps) to drive the motor, the current doesn’t produce enough of a magnetic field to distort the MRI’s image. Feinstein said the MDA builders tried out a couple different motor concepts. “Ultimately, our motor was the only motor that claimed to be non-magnetic and was non-magnetic.”

Feinstein says that the neuroArm’s creator, Calgary professor of neurosurgery Garnette Sutherland, is doing early trials with the device, using mannequins and cadavers to show that it’s safe and reliable. He expects there’ll be about 100 test robots built over the next four years while the thing works its way though the U.S. Food and Drug Administration’s and Health Canada’s approval processes, with clinical trials going on in various hospitals.

He also expects that the developers of the robot will want to make a smaller version of the current prototype, and then might look at tools for other types of surgery that could be done using MRI. For instance, an MRI image could provide a very clear picture of where a prostate tumor ends and something you really don’t want to cut out begins. And for tools that use lasers or ultrasound to burn away tumors, the MRI could provide not only a 3D image but a heat profile, giving doctors finer control of exactly what they’re zapping.

The three-way collaboration began almost by accident, the way Feinstein describes it. He’d been to MDA about five years ago to talk about whetherJohnson Electric’s motors might be useful in the space-based systems that MDA builds. They might be used to focus or aim a laser beam on some space-based spectroscopy instrument, for instance. Later, when Calgary teamed up with MD Robotics, the MDA’s robot-building branch, the MDA engineers knew where to go for motors.

Feinstein says Johnson Electric created Johnson Medtech last December to bring together experts from its different subsidiaries to see which of the company’s existing technologies could be applied to the medical field. Johnson Medtech is based in Methuen with Parlex, which makes printed circuits for, among other things, medical equipment. Nanomotion, of Ronkonkoma, NY, is the U.S. headquarters of an Israeli company, and brings the expertise in piezoceramics. Saia-Burgess Controls, a Swiss company, builds control systems for automation.

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