International recruiting giant snaps up Canada’s CNC Global

One of the world’s largest staffing providers has expanded its Canadian presence with the acquisition of a Toronto-based headhunting firm in an all-cash transaction for an undisclosed amount.

Vedior North America (Vedior NA), a wholly-owned subsidiary of Netherlands-based Vedior, NV, said its acquisition of CNC Global Ltd., which was owned by investment firm Torquest Partners Inc., will strengthen its IT staffing presence in North America, which is currently offered through its sister operation, Sapphire Technologies, in Woburn, Mass. Vedior NA also owns ATS Reliance Technical Group, which has nine offices in three provinces and specializes in staffing manufacturing, engineering and consulting sectors.

Terry Power, president and chief operating officer of CNC Global, said his company will continue to operate with its existing management structure and there won’t be any job cuts.

“Our company will continue to expand,” said Power. “Vedior’s policy is to acquire strong local companies and support them in growth, as opposed to integration and rationalization.”

CNC Global, which will keep its name as a wholly-owned entity inside of Vedior, has more than 250 employees in 11 offices across Canada, including Victoria, Vancouver, Edmonton, Calgary, Regina, Winnipeg, Toronto, Ottawa, Montreal and Halifax. The deal, which closed on May 1, gives Vedior a total of 1,400 internal and 14,000 contract employees with a combined annual revenue in the hundreds of millions.

CNC Global marks Vedior’s sixth and largest acquisition of late. Vedior NA began negotiations with CNC Global late last year that evolved from CNC Global approaching Vedior about partnering a year and a half ago.

“We see great opportunities in expanding vertically through various specialist offerings in the Canadian market,” said Vedior NA president Bruce Wideberg, adding verticals include accounting, finance and health care. “(The acquisition) gives us a better North American fit for our clients and increases our capabilities across borders.”

With demand for IT skills outstripping supply in the Canadian market and competition from other staffing firms like Brainhunter (which has made some acquisitions in Canada recently) and Eagle Professional Services Inc., Vedior NA’s move comes as no surprise to industry experts like Paul Swinwood, president of the Software Human Resource Council (SHRC) in Ottawa.

“As a sector matures, you start to see some of them being swallowed up. Brainhunter is very active in this and they’ve been acquiring a lot of (Canadian) firms lately. Am I surprised? Absolutely not. Welcome to the global economy.

“The question is are we going to be a global player or are we going to be roadkill?”

Vedior has a network of over 2,200 offices worldwide in 44 countries focusing on IT, healthcare, accounting, engineering and education.

Globalization plays a large role in the long-term growth of CNC Global and is key to serving customers better, said Power.

“Customers are looking for more global solutions,” he said. The Vedior network provides us with an opportunity to serve our customers around the world and to provide localized service in any country where they have branch offices.”

In addition to playing in a global economy, Wideberg said companies are also looking to increase their efficiencies and value to their market through IT.

“One of the best returns of that investment is to make their workforce more productive through implementation of IT systems,” he said.

Swinwood said many firms look to Canada for IT workers because Canadian IT workers are well educated and highly skilled. SHRC’s statistics show there are 600,000 people in the IT sector in Canada with a two per cent unemployment rate.

“When you look at that size of potential market and you look at the global demand for competent IT workers, we’ve got a pretty good supply here,” Swinwood said.

But with fewer young Canadians enrolling in IT programs at the post-secondary level, the IT sector is becoming a tight labour market. Staffing companies like CNC Global and Vedior NA are looking for graduates with a combination of business and IT skills.

Power agreed that this is a challenge the IT industry faces, which is why his company recently partnered with Ryerson University’s Information Technology program, which gives graduates a Bachelor of Commerce with a specialty in IT.

“One of the realities that exists out there is that more technology is becoming integrated into the business. We like to focus with education institutions where that happens,” he said, adding women in IT is also another area that’s on the decline in terms of number of student enrollments.

Comment: info@itbusiness.ca

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