Compugen Inc. has moved to expand its presence in Quebec by swallowing a Montreal-based health care IT services specialist.
The company announced today that it has bought Groupe Conseil LSGI, a 10-person shop founded in 1989 by CEO Norman Renaud.
“We kept it a small, family-sized company,” Renaud said in an interview. But “the restructuring of the health care system in Quebec has meant a lot of consolidation of establishments and the average network has increased, so we have to deal with a lot bigger networks than we used to.
“So we needed to find a partner who could support us in terms of relationships with (IT) manufacturers and the specialized resources they have to give us a hand in consolidation projects.”
After talking to candidates he came to an agreement with Compugen, which ranks 6th on CDN’s Top 100 Solution Providers with annual revenues of roughly $225 million.
Neither side would reveal financial details of the deal, but it calls for the LSGI team to work out of Compugen’s Montreal office. Renaud will be their leader.
Compugen has a strong presence across the country, but according to Gilbert Boucher, the company’s vice-president of strategic business development it only had a “very minimal” offering in the Quebec health care sector. About seven people were selling products but not services, he said. The addition of LSGI, which specializes in helping institutions plan, deploy and maintain IT systems, expands its capabilities.
LSGI leads with Citrix and VMWare consolidation software, as well as products from Hewlett-Packard, IBM and Microsoft.
One of Renaud’s priorities in the deal was to make sure all of his staff would be retained, he said, not the acquisition price. “With Compugen’s plans to expand the Quebec sector as well there will be a lot of opportunities for those employees as well.”
“The most important thing for me was to find a good fit with an eventual partner,” said Renaud. “Of course, money is important but it wasn’t the first issue. We wanted to find a partner that would match to reach those goals.”
While Compugen has seen competition in Quebec increase with the expansion of giant CGI and Bell Canada’s acquisition last year of Nexxlink Technologies, adding a 10-person firm was just right.
“The size was perfect for us,” said Boucher. “In the professional services business you have to create demand before you have the ability to deliver it. It’s very costly to have a lot of people on the bench ‘just in case.’”
“To have 10 people plus the seven we have will make us a good player in the Quebec market.”
Compugen hopes to trumpet its new partnership in a marketing campaign with the help of Citrix and IBM, he added.