CNC Global plans growth following acquisition

Torquest Partners Monday purchased IT staffing services firm CNC Global at a time when the market is experiencing rising demand for technology workers after a few years of retrenchment.

Under the deal involving Torquest Partners Inc., a private equity fund, and Scotiabank Private Equity Investments,

Toronto-based CNC Global Ltd. will see no changes in its management team or in relationships with vendor partners and customers.

CNC Global said it will gain access to additional equity and the expertise of Toronto-based Torquest, which has a market capitalization of more than $180 million. The financial terms of the agreement were not disclosed.

“”Now that we’re seeing a flow of investment into a major player, that bodes well, I think, for the business,”” said Stephen Mill, Canadian regional manager of staffing firm Robert Half Technology in Toronto. Generally speaking, he added, “”I think people are so reluctant to say the market is better.””

According to Robert Half Technology, which publishes a quarterly IT hiring outlook, in June about 15 per cent of CIOs expected to add IT staff in the next year and two per cent planned personnel cutbacks. Eighty per cent aimed to maintain existing staff.

Mill said the survey reflects the fourth consecutive quarter the Canadian IT sector has grown substantially since being “”at the bottom of the barrel”” two years ago.

Lyle Kerr, CEO of CNC Global, said his company has a two-fold strategy to cultivate growth. “”So we’re going to open an office in Halifax and beef up our presence in our other offices like Vancouver and Montreal. We’re looking to hire good sales people and recruiters to join our firm. Let’s say around 20 . . . across the country.

“”Then we’re looking for some acquisitions. I can’t really talk about them, but we do have a couple of target companies in mind that we would like to have join our firm. We’re looking for companies of the same focus as we are,”” in other words, ones specializing in technology, contract and permanent staffing and recruitment advertising.

CNC Global plans to bulk up over the next couple of years to capitalize on Canadian economic growth. “”We want to do it sooner rather than later, I guess you would say,”” said Kerr.

Yet as much as the staffing company is eager to add muscle, Kerry is opposed to diversifying too much because, in his experience, companies have done well only when they have stayed true to their main strengths.

This is another reason why there are no immediate plans to expand internationally, he said, adding CNC Global sold some American offices when Kerr came on board two-and-a-half years ago.

In response to a more buoyant economy, Kerr said it has hired steadily, spent about $1 million over more than a year upgrading its computer systems and undertaken substantial training of recruiters.

In “”raw numbers,”” said Christopher Drummond, CNC Global’s director of marketing, a year ago the organization received 15 daily requests from IT firms to fill positions, whereas today this has grown to 25 daily requests.

“”Some of the real hot skills that our clients are looking for”” relate to hardware upgrades, strategic software development, e-commerce, security and wireless applications, Drummond explained.

He said CNC Global is mainly recruiting Web developers, networking, hardware and help desk support, as well as business systems analysts and project managers —— two positions at the “”front end of the project cycle,”” which suggests the need for other staff further into the process.

The growing interest of firms in outsourcing, meanwhile, has boosted the business of CNC Global which, as a pure staffing firm, Kerr said, isn’t a competitor of systems integrators like IBM and Sierra Systems. “”As a result, when somebody outsources their IT shop to IBM . . . we’ve partnered with them and helped supply the staff in the outsourcing arrangement.””

Last year, CNC Global earned revenues of $147 million and estimates this year grossing $170 million.

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Jim Love, Chief Content Officer, IT World Canada

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