OpenText to create 1,200 jobs, gets $120 million from province

The Ontario government is pumping $120 million into Waterloo, Ont.-based OpenText to buttress a $2 billion company investment expected to create 1,200 jobs, Premier Kathleen Wynne announced Friday.

“I am thrilled that OpenText decided to carry out this expansion in Ontario . . . I’m pretty sure there were other places you could have gone,” Wynne told a news conference, saying this growth will not only affect the Waterloo Region but also Toronto, Richmond Hill, Peterborough, Kingston and Ottawa.

With its investment, OpenText plans to double its Ontario workforce to 2,400 employees — making on average $65,000 a year — over the next seven years. The company has about 8,200 employees in 33 countries.

Among other things, OpenText plans to locate a new $80 million customer briefing centre in downtown Toronto.

“I am quite confident that without us actively and aggressively pursuing this investment . . . that this expansion would have happened elsewhere,” Economic Development Minister Eric Hoskins told the Toronto Star.

Earlier, while speaking in Oakville, Tory Leader Tim Hudak said he would get rid of “corporate welfare” and introduce instead lower taxes for all employers.

“We are proud to be an Ontario company,” Mark Barrenechea, president and CEO of OpenText, said, adding he gets lobbied weekly by officials from various U.S. states and other countries wanting OpenText to relocate.

“We are an Ontario-grown global company. And we chose to invest here because of the highly educated workforce, our strong university partnerships in R&D, as well as the province’s robust and innovative startup communities,” Barrenechea stated.

Hoskins explained that, in order to qualify for the government grant, OpenText is required to meet certain job creation thresholds, and that there will be a 30 per cent holdback “to make sure that at the end of (seven-year) term that they have hit their target.”

OpenText started as a technology spinoff from the University of Waterloo in 1991. It had four employees then. Today, the company has 100,000 customers. It got its start with Government of Ontario venture capital support.

“It is a really great success story,” Hoskins said, noting that in its early days OpenText, in a then partnership with Yahoo, was asked to build an Internet search component for the Oxford dictionary.

On Friday, OpenText posted quarterly net earnings of $45.8 million or 33 cents per share, up from $25.8 million or 22 cents in the comparable year-earlier period as revenue rose to $442.8 million from $337.7 million. The company also upped its quarterly dividend by 15 per cent to 17.25 cents a share. Its shares climbed $3.30 or 6.49 per cent to $54.11.

With files from The Canadian Press

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