Published on July 07, 2014
Karl Kenny at Marport’s offices on Harbour Drive in St. John’s. Kenny successfully spun off a new venture, Kraken Sonar, in 2013. Kraken's home is in the same Harbour Drive office building. — Telegram file photo
Published on July 07, 2014
Neil Riggs, then-vice-president of research and development with Marport Canada Inc., displays a model of the company’s underwater robot the SeaQuest X-1 at the 2007 Unmanned Vehicle Systems conference at the Fairmont Newfoundland hotel in downtown St. John’s. — File photo by Joe Gibbons/The Telegram
Marport restructured, pieces were sold in midst of 2013 receivership
The name Marport lives on in the world of global technology, but no longer refers to a prized jewel of Newfoundland and Labrador’s growing ocean tech sector.
Marport Deep Sea Technologies and a collection of affiliates — Marport Canada, Marport Marine Canada, Marport C-Tech, and Marine Robotic Inc. — quietly entered into receivership in October 2013.
The companies have been split, with other companies buying up rights to the Marport name and intellectual property.
The receivership has also resulted in the disappearance of the company’s offices here and a loss of the name in this province.
Hailed for its subsea technology and specialized sonar systems, the core of Marport — Marport Deep Sea Technologies — was well known within the province, operating from its offices on Harbour Drive in St. John’s.
Technology produced by Marport was, and still is, being used globally in the fisheries, underwater defence, offshore energy and ocean science sectors.
“I think the underlying technology and the underlying business was still valid and strong, but that doesn’t always necessarily mean the structure worked,” said Derrick Rowe, formerly a director with Marport Deep Sea Technologies.
“I think it really is irrelevant where it was (located) and I don’t think there was any Newfoundland component that was negative at all. I think it was just the situation that the company took on a lot of debt and risk, and sometimes that needs to be restructured. And that’s what happened. It got restructured, and when it got restructured, the Newfoundland component was not really part of it anymore,” he said.
“I’d have to say I was disappointed, extremely disappointed, with the final outcome. That’s probably the best way to describe it.”
Rowe was one of two directors of the company who were based in Newfoundland and Labrador. The other was Karl Kenny, who was also a longtime president and CEO. In May 2012, Kenny was inducted into the Junior Achievement Business Hall of Fame, highlighting his work in expanding Marport. The same year, industry publication Marine Technology Reporter placed Marport on its Top 100 list of significant companies. It was the fifth year in a row Marport earned a place on the list.
Kenny successfully spun out a new business from Marport, Kraken Sonar Systems, early in 2013. He did not respond to requests for an interview for this story.
Former premier Brian Tobin, now based in Toronto, was also listed as a director of Marport Deep Sea Technologies, but was unavailable for an interview prior to deadline, being on vacation and disconnected.
Other directors were based in Iceland, where Marport began in 1996 (before arriving in Canada in 2003), and in the United States.
“There was obvious financial pressure in the company. That was clearly the case and it had a pretty big shareholder out of the U.S. that was dictating a lot of the direction,” Rowe said when asked about the receivership.
He said the fallout was not of benefit to the province, with the company operations now based elsewhere, but also has not been of benefit to shareholders, including himself. Shareholder information is not widely available.
Attempts were made to avoid the receivership, according to documents at the Supreme Court of Newfoundland and Labrador.
“As the Marport Group’s financial situation deteriorated, management sought to sell (Marport)
C-Tech to enable it to pay down debt,” it states, noting the attempt to generate a sale lasted more than a year.
C-Tech was identified for sale because it was a later acquisition for Marport and operated — with its development and manufacturing base in Cornwall, Ont. — as a stand-alone entity. In all, 33 potential buyers were identified for the subsidiary company.
Eight of those requested further information. From there, three went on to dig deeper and two offered an expression of interest in an acquisition.
However, no sale emerged.
Since the start of the Marport receivership, C-Tech has been picked up by Nautel, out of Nova Scotia.
“We’re hiring back employees. We’re getting the existing relationships revived and reasserting the company,” said John Whyte, director of marketing for Nautel, in an interview Monday.
AIRMAR Technology Corp. has purchased “substantially all of the assets of Marport Deep Sea Technologies’ commercial fishing division” as well as the Marport name and website, according to an Oct.14, 2013 news release.
“We have been working successfully in partnership with AIRMAR Technology for a long time. We are looking forward to becoming a part of their comprehensive offerings and to significantly expand our commercial fishing product range and customer base,” said Oskar Axelsson, Marport Deep Sea Technologies’ executive vice-president for sales.
At the Newfoundland and Labrador Association of Technology Industries (NATI), CEO Ron Taylor said the technology sector as a whole in Newfoundland and Labrador has been growing exponentially, moving from an estimated total value of $460 million in 2004 to $1.6 billion last year.
“There’s always going to be companies that for whatever reasons come and go, but the (technology) sector as a whole is extremely healthy. We’re forecasting and planning for a sector that’s going to be worth about $4 billion by 2025,” he said.
“(And) I think that if you look at the future of Newfoundland, the technology sector (is) going to play a huge role.”