Change in Focus Helps Corel Regain Footing
Under new ownership, software vendor downsizes, zeroes in on small businesses and consumers, and embraces digital photography boom.Only three years ago, Canadian-based software company Corel Corp. looked to be circling down the drain. Despite such software offerings as the venerable WordPerfect and CorelDRAW, Corels stock was hovering at about 70 cents per share. The company had already gone through at least seven rounds of layoffs and was losing millions of dollars annually. In August 2003, Vector Capital, a San Francisco-based software investment firm with $500 million in equity capital at its disposal, bought the struggling Corel for about $125 million. After Vector Capital took Corel private that October, Amish Mehta, a Vector Capital partner, took over as interim CEO.
Over the next 20 months, Mehta, who is now chairman of Corel, led Corel to what appears to be a stunning turnaround for the formerly moribund company. While private companies are not required to make their sales figures available to the public, the strategies Corel has implemented during this short time would seem to support Mehtas assertion that Corel had, within six months of going private, one of the top five profitability rates in the software industry.