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UPDATE II: In a statement announcing today's deal, NextWindow chief executive Al Munro says “NextWindow’s development of optical touch technology complements Smart’s efforts, and I’m delighted we’re becoming part of Smart." 

But relations between the two companies haven't always been so collegial. Today, one NextWindow insider told NBR the takeover was the final act in a year-long legal tussle between the two companies.

The fight began on April 09 last year, when Canada's Smart Technologies filed a lawsuit in the United States District Court for the Northern District of Illinois alleging that NextWindow had violated its Digital Vision Touch patent technology portfolio.

Smart said it was seeking an unspecified amount of damages as well as an injunction against NextWindow to prevent the importation and sale of infringing products in the United States (which would include PCs made by HP, Dell and others using NextWindows' touchscreen panels).

The NextWindow insider told NBR the legal spat has dragged on over the past year. "This [deal] gets rid of that."

Smart chief executive Nancy Knowlton, who announced the action on April 9 last year, on April 21 this year became NextWindow's sole director.

UPDATE I: NextWindow's San Francisco-based marketing manager David Villarina told NBR the company's Auckland office would be retained in the wake of the Smart Technology deal, and that there would be no change to staff. Overall office space would be doubled in the coming year, said Mr Villarina.]

One of New Zealand’s hottest tech companies – NextWindow, a touchscreen maker with a turnover of $40 million that numbered Dell, HP, Sony, Lenovo and NEC among its customers – has been sold to a Canadian outfit.

The deal, announced in Calgary today, sees NextWindow fully acquired by Smart Technologies, a Canadian maker of smart whiteboards.

Smart Technologies is backed by US chip giant Intel, and other private equity investors, and currently mulling an IPO that would value the company at around $US2 billion.

Terms of the deal were not disclosed.

NextWindow revenue surged to $US31million ($40 million) in the year to March, 2009 (from the previous year's $6.5 million) as Microsoft’s Windows 7 software helped push its touchscreen technology toward the mainstream. 

The company is profitable, marketing manager David Villarina told NBR today, but he would not give further figures.

The Auckland-based company sells its touchscreen panel to Dell, HP, Sony, NEC and other large computer companies. HP’s TouchSmart series (pictured above) is one line of PCs that features technology made by NextWindow.

Onward to $60 million
Last year, swapping email with NBR as he shuttled between Silicon Valley (home of HP), Seattle (Microsoft) and Taiwan (where most of his company's hardware gets made), NextWindow chief executive Al Monro said he expects NextWindow to enjoy 50% growth in 2010, or revenue of $60 million. The HP deal was responsible for most of last year's surge.

Such rapid growth saw NextWindow, founded in 2001, featured on the Deloitte Fast 50 company list late last year, ranked third, and also named 27th on the wider Deloitte 500 Asia Pacific list.

What's wrong with this picture?
Still, amid all the success, one thing bugged Mr Monro.

At the Fast 50 gala presentation in Auckland on October 28, the NextWindow boss told NBR he was disappointed his company could not attract any significant local private equity investment.

With local backers thin on the ground NextWindow had turned to a Kuwaiti investor.

Of NextWindows 48,406 private shares, Kuwait Finance House owns 22,741. 

The next biggest investor is the New Zealand Australia Private Equity fund which, like Kuwait Finance House, is headquartered in Bahrain. It holds 6354 shares.

Third is Australia's Jolimont Capital Partners, with 5616.

The remaining minority is held by a number of local investors, including Ascot Private Equity with 4376 and Mr Monro with 2760.

An April 21 amendment saw Nancy Louise Knowlton - Smart Technology co-founder and co-chief executive - become NextWindow's sole director.

More growth, hard yards ahead
Mr Monro said he saw touchscreens as a high-growth area, especially once add-on kits began to be produced that could give any basic screen touch capability.

However, he also saw touchscreens becoming an increasingly commoditised and competitive market, he told NBR.