How a compliance firm is speeding its growth with an acquisitions strategy

By Verne Harnish

Jonathan Brun founded Nimonik – Regulatory Compliance Management Software, a company, based in Montreal, to help organizations achieve environmental, health and safety compliance, in June 2008. By using a growth-through-acquisitions strategy, the mobile-solutions company has expanded to 39 employees since then.

Nimonik acquired Conformance Check Inc., a Toronto company that provided legal compliance regulatory analysis, in 2016. Then, in 2017, it acquired Envitool, a Shanghai, China-based company that had made a name for itself in environmental health and safety compliance and regulatory analysis. By 2022, Nimonik was ready for its third acquisition, MediaLogic Inc., a compliance and regulatory software solutions company headquartered in Calgary, Canada. 

The Scaling Up platform has helped Brun and his leadership team build a unified company since they began using it in 2019. “Scaling Up was an important part of that process,” Brun says.

Identifying friendly targets

Nimonik’s acquisition strategy has been a simple and straightforward one: to purchase competitors. “We buy very similar companies,” says Brun. “We’re consolidating the market and reducing the number of competitors. Our business will grow much faster that way than if we tried to get their clients for ourselves.” 

Building strong relationships in the industry has made it relatively easy to find acquisition targets. “A lot of our strategy is making sure we maintain good relationships with our competitors,” says Brun. “When those people want to retire, we have a discussion.” 

The one exception to this strategy was Envitool, which, Brun says, was a case of “right place, right time.” Brun had reached out to the company about something else and got to know its team in China. One thing led to another, and Nimonik had soon acquired the company. “That deal was a little bit of luck and opportunity,” he says. 

Swapping shares

Nimonik is a privately held, bootstrapped company, and it does not have outside investors. The Conformance Check and Envitool acquisitions were done through share swaps, in which the owners were given shares in Nimonik in exchange for shares in their companies. “There wasn’t a lot of money involved,” Brun says. The company paid cash for MediaLogic.

Not every deal was successful. “One deal we wanted failed for lack of financing,” Brun says. “We had a signed agreement but couldn’t find the capital to do the deal. That company ended up being bought by another company in 2019.”

Combining cultures

Brun looked for acquisition targets that had a similar culture to Nimonik, which laid the groundwork for success. Using Scaling Up to unite the team helped in building a cohesive culture after the acquisitions.

“All three that we’ve done have been successful,” he says. “We are very happy with the results. The staff came on board and largely stayed on. Customers have stayed on.”

Migrating customers

The one surprise for Brun and his team was the amount of time it takes to migrate a customer from the acquisitions to the main company. “We definitely underestimated that and probably over-estimated how quickly we could upsell and cross-sell the customers we were acquiring,” he says.

Fortunately, he now has a deeper talent bench to address challenges like this.  Nimonik is working on another deal in Toronto it expects to close this year. With his acquisitions strategy in place, Brun is just getting started.