CGI Group on Tuesday said it was selling off a business unit that conducts background checks and claims investigation to a Montreal firm in a deal worth $3.5 million.

Garda World

Security Corp. said it would acquire the KeyFacts Enterprises Canada Inc. division from CGI. KeyFacts was formed about 80 years ago and includes several large insurance companies among its clients, the companies said.

Three years ago, CGI bought the Underwriters Adjustment Bureau (UAB), which provided claims management, underwriting and actuarial services for the property and casualty insurance industry, in a deal worth $53 million. At the time, the acquisition was intended to help CGI better serve longstanding clients in the insurance industry, which includes Montreal-based Industrial Alliance. UAB, in turn, was in the midst of integrating KeyFacts, which it had acquired around the same time. 

“They’re a branch, if you will, that collects information, does inspections, surveillance, security. They’re not core to what we do as a company,” said CGI spokeswoman Eileen Murphy. “It made sense to align them with someone like Garda World.”

Garda COO Patrice Boily said his firm was originally approached about KeyFacts by PricewaterhouseCoopers, which had been retained by CGI to find a buyer for the division. Garda is already involved in a variety of physical security markets, Boily said, including cash transportation and ATM maintenance. KeyFacts will allow Garda to become a major player in the investigation business, he said.

“A lot of people think that a company like KeyFacts is a technology house, but they are much more technology users,” he said. “It’s a database and labour-intensive company, which fits into a lot of the different products Garda sells.” 

Murphy said it is an ongoing part of CGI’s business practices to review its operations to ensure they are aligned with its strategy.

“In general, when companies acquire other companies, they’re acquiring a company often that has acquired many other companies before,” she said. “Certainly Cognicase had acquired a lot of other companies.”

CGI acquired Cognicase, one of its chief rivals in the Canadian outsourcing space, in 2003.

Last year, CGI made one of its biggest acquisitions to date, of American Management Systems Inc., based in Virginia near Washington D.C.. The transaction saw CGI add approximately 4,500 people to its ranks, bringing CGI to about 25,000 employees in total and giving the Montreal firm more access to the U.S. market.

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