Merlin Technologies heads to the U.S.

It's HQ is moving here and it seeks a U.S. manufacturer
Monday, July 1, 2002


BURNABY, B.C.-Canadian company Merlin Technologies, which a year ago entered the security market, is relocating its headquarters to the United States by the end of this summer.

The move to the U.S., with company officials targeting the Northeast such as the Boston or New York area, is part of the company's strategy to expand its presence in the United States and its overall business.

"There's a much bigger market in the U.S. and we want to start targeting that," said William Johnson, who was recently named president and chief executive officer of the company, which makes a digital video recording product and a network data storage system.

To pay for the new headquarters, an expanded sales effort and additional materials to produce more product, the publicly traded company restructured its Series A Convertible notes. The plan is to raise $5 million by the third quarter of the calendar year. Merlin Technologies also restructured some debt in May to simplify its capital structure and facilitate this additional financing.

As part of the move Merlin Technologies will select a U.S. manufacturer to produce its recently released digital video recording product, SecureDVR. A second generation of the product is slated for this fall. The company also has a network storage system known as EssentialServer.

While company officials at Merlin Technologies will maintain manufacturing in Canada, signing on a U.S.-based manufacturer will provide the company with "volume manufacturing," said Johnson.

"It will be in addition to it," said Bob Murray, vice president of sales and marketing for Merlin Technologies. "We will continue to build for the Canadian market."

In Canada, the company has signed a deal with systems integrator Chubb. Company officials are seeking similar agreements here in the U.S.

"Our strategy is to work through integrators and value added resellers," said Johnson. The company's first U.S. partner is ICICI ­ Infotech, an IT consulting group in the Northeast part of the United States.

Though Merlin Technologies will locate its headquarters in the U.S., it will still maintain its office here. The company's founder, Robert Heller, will become president of the company's Canadian operations.