Local telecom startup FirstHand Technologies Inc. has been sold to a Vancouver-based company owned partially by Sir Terence Matthews and his son Owen, for about $9.3 million in stock.

CounterPath Corp. said it has entered into a definitive agreement to acquire FirstHand, which was founded in 2002 as SIPquest, in exchange for 29.5 million shares of CounterPath's common stock.

CounterPath said it would combine its suite of softphone and server applications with FirstHand's fixed mobile convergence solutions to "deliver an integrated communications experience and empower workforces to go mobile."

FirstHand makes technology which allows smart phones and dual-mode devices to have the same functionality as Internet protocol PBX phones, using mobile networks such as Wi-Fi and GSM.

"The acquisition of FirstHand allows us to extend our carrier and enterprise client value proposition from the personal computer to most major mobile devices. All of our tier-one fixed-line carrier customers own, operate or partner with a mobile service provider in one form or another," said CounterPath CEO Greg Pelling in a statement. "Our new mobile software products create tremendous opportunities for CounterPath to lever our trusted supplier relationships and add even greater value to our world-class customers' voice-over-Internet-protocol (VoIP) offerings."

Last summer, CounterPath bought Owen Matthews' NewHeights Software Corp. for US$21.6 million, with Terry Matthews' investment firm Wesley Clover providing a $5.5-million investment to gain ownership of roughly a quarter of CounterPath's shares.

The elder Mr. Matthews commented that the deal was a "solid acquisition for CounterPath," adding that the company would also add to its engineering team with FirstPath's 45 staff and broaden its intellectual property portfolio with the company's 11 pending or approved patents.

The deal will see FirstHand become debt-free and contributing approximately $6 million in cash to the combined company, with FirstHand's investors – including Covington Capital, Skypoint Capital Corp. and BDC Capital Inc. – collectively owning about 23 per cent of CounterPath's common shares.

The deal is expected to close on or about Feb. 1.