Terry Matthews has been actively involved in the telecommunications industry for more than 40 years now. In 1972, Terry partnered with BNR colleague Michael Cowpland and founded Mitel Corporation. Wesley Clover was the holding company put in place to facilitate this initial venture. With a $4,000 loan, Mitel successfully developed and produced tone receiver technology that was used in the telecom industry transition from rotary-dial telephones to touch-tone phones. By 1975 the company had developed the first microprocessor controlled, software-driven, private automatic branch exchange (PABX) telephone system, enabling the company to continue its success on a much greater scale.
The company grew and evolved and continues to this day. Mitel is now a publicly-traded global leader in the business communications systems and software marketplace, with more than $1.0 billion in annual revenues. The semiconductor division continues to operate today as Microsemi Corporation, formerly Zarlink Semiconductor Inc.
In 1986, Terry went on to found Newbridge Networks Corporation, with a personal investment of $13.0 million. A small group of seed investors were invited to participate in the funding of Newbridge in 1987. That company grew organically, from no revenues in 1986, to $64.0 million in annual revenue at the time of its 1989 initial public offering. With Terry as the Chairman and CEO, Newbridge continued to grow into a global leader in the data networking industry. By 2000, the company employed more than 6,500 people worldwide and had annual revenues of $2.0 billion. Shortly afterward, Newbridge was sold to Alcatel for $10.32 billion.
Along the way, Wesley Clover has developed the Affiliate Model of further investing, leveraging its larger portfolio companies and strategic partnerships to identify and gain early insight into emerging opportunities in the ICT industry, and to act upon those opportunities. The first Affiliate Model was introduced at Mitel Corporation in 1982, with the formation of Mitel Datacom Inc. With an initial investment of under $200,000, Mitel Datacom developed the first equal access dialer. Within three years, the company’s revenues grew to more than $30.0 million, and reached $77.0 million by 2000, with gross profits of approximately 70%.
Trillium Telephone Systems Inc., another Mitel affiliate, was launched in 1983 with an initial investment of $13.0 million. By 1989 Trillium had achieved annual revenues of more than $65.0 million. These two investments set the stage for Wesley Clover to deploy its Affiliate investing model more fully after the formation of Newbridge.
The formal Newbridge Affiliate Program started with a $1.5 million investment in Crosskeys Systems Corporation, which yielded proceeds of $49.8 million over time. Success was repeated with investments in Northchurch Communications Inc., FastLane Technologies, Inc., Cambrian Systems Corporation and Ubiquity Software Corporation, with each company selling for $595.0 million, $149.0 million, $448.0 million and $169.0 million respectively.
These companies all benefited tremendously from Terry’s direct involvement. As an early and often key investor, he was instrumental in identifying and selecting specific product investment opportunities, structuring the technical and business teams, and developing the companies’ strategic and go-to-market plans.
Between 1994 and 2000, Terry invested $55.5 million in a portfolio of 26 companies through Celtic House, his personal, wholly-owned investment vehicle. Notable investments include Abatis Systems Corporation, Extreme Packet Devices, Inc. and Bookham Technologies Ltd. This Celtic House investment portfolio generated returns on those investments (ROI) of more than nine times.
During this period, Terry played an integral role in identifying, selecting, structuring and developing the investment opportunities, often serving as Chairman of the Board of Directors for these portfolio companies. In 2002, the investment team that had been hired by Terry into Celtic House chose to spin out on their own and form Celtic House Venture Partners (“CHVP”). CHVP became an independent fund that was not related to that of the original Celtic House. Terry continued as a limited partner in the newly established CHVP, but he did not manage the new CHVP investments directly, and 2006, he divested himself of his interests in CHVP.
In 1980, Terry began to diversify his investments outside of the ICT sector. His initial step was the purchase of the Celtic Manor in the United Kingdom. Since he took ownership, the simple hotel has grown to become a major, award winning European resort, golf and business conference center. For example, the 2010 Ryder Cup Golf Tournament was hosted at the Resort.
Back here in Ottawa, further diversification came with the establishment of the Kanata Research Park in 1986. This facilitated the purchase over time of more than 500 acres of premium land and the development of Class A office accommodation with a total capacity of nearly 4,000,000 square feet. More than half that capacity is already in use today. And central to that office park, the Marshes Golf Club and the five-star Brookstreet Hotel were opened in 2002 and 2003 respectively, providing world-class leisure, meeting, dining and hotel services for local and international patrons.
Terry began to use Wesley Clover as a direct investment vehicle in 2000, and since 2002, the firm has operated as an investment management and holding company, focusing primarily on early-stage investments in the ICT sector. Wesley Clover has developed into a world-class investment firm with a team of more than 30 seasoned professionals and support staff.