CGI Group Inc. bought two small technology companies Monday that executives said would strengthen its capabilities in retail system integration and Web-based transactions.
The Montreal-based outsourcing giant said it spent a combined
CGI president and chief executive officer Michael Roach said Myriap had been 75 per cent owned by AGTI and 25 per cent owned by its employees. CGI, which had its own stake in AGTI, made the acquisition offer to both parties. This will allow the outsourcer to integrate Myriap personnel directly into its Toronto and Montreal operations, said Roach.
Roach described Myriap as a company rich in high-end technical personnel who specialize in Java-based Web transactions. “”This was an efficient way to bring those deeper skills into the company to serve not only our existing clients but also expand those into other areas,”” he said.
CGI clients like BCE are using Web transactions as the standard way they work with their customers, Roach said, while government customers are increasingly allowing citizens to renew licences and perform other services online.
Jason Bremner, an outsourcing analyst with Toronto-based IDC Canada, said many enterprise companies are moving functions like invoicing over to the Web as a sort of testing ground for other mission-critical functions.
“”I think it will be system or application-specific, then it will keep on increasing,”” he said. “”As people conduct or certain vendors conduct more and more transactions online, we would expect to see a greater degree of outsourcing.””
Reston, Va.-based Netplex Systems Inc., meanwhile, provides warehouse management and storage system integration for about 240 clients, including Macy’s, Toys ‘R Us and Value City. Roach said about 25 per cent of Netplex’s revenue comes from high-end consulting — helping businesses assess their technology needs and create plans — while the balance is between integration of packages like J.D. Edwards and custom development.
“”They’re like other verticals, where more packages are being looked at, more ERPs,”” he said. “”It’s not one of our biggest verticals right now, so it’s one of the reasons why we’re kind of bulking up there. We’re looking for niche applications, niche players in this space to increase our critical mass.””
CGI has a long history of acquisitions, having purchased about 30 firms in the last 15 years. Last year it completed its largest transaction ever, the US$438 million merger with IMRGlobal. While the current market environment doesn’t mean CGI is accelerating its acquisition strategy, Roach said it may have a better group of potential targets.
“”Now is a good time to acquire firms,”” he said. “”There’s a lot of quality firms out there that fit our acquisition criteria.””
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