CGI Group Inc. has made an acquisition to expand its influence in the Western provinces and gain a foothold in regional government markets.
The company Wednesday said it would buy certain assets of consulting firm GDS & Associates
Systems Ltd. Financial terms of the deal were not disclosed.
The purchase will add 61 to CGI’s existing headcount of approximately 1,000 professionals operating in the West. It will also provide CGI with a Victoria office, which senior vice-president of Western Canada Terry Johnson described as an ideal location from which to do business with the government of B.C.
“”To really have a chance to win business and position ourselves there (in B.C.), we needed a presence in Victoria . . . where most of the government decision-makers reside,”” he said. “”This gives us . . . a company that already has revenue and long-term client relationships.””
CGI already has an office in Vancouver and operates two vertical units in the West for credit union/financial services and insurance business services.
GDS, which has an annual revenue of $6 million, was founded in 1984. Its first office was in Regina, and then expanded into Edmonton and Victoria to garner public sector business. CGI will also take ownership of GDS’s Regina and Edmonton locations and integrate those into existing offices.
“”We’ll be meeting with them right away, starting today to start a more formal integration plan. . . . We’ll just work that through over the next couple of weeks,”” said Johnson.
He added that the two companies are already familiar with each other’s work. For example, they both have a contract in place with Alberta Sustainable Resources. “”CGI sort of owned half of that account on an outsource-type basis and we owned the other half,”” explained GDS president and CEO Willis Groshong. “”It makes good sense not only for CGI but for the customer being able to deal with one firm.””
Groshong said GDS had to obtain approval from each of its customers to transfer the contracts to CGI. The same service team will work on the existing contracts, only under a different name.
It was GDS’s Victoria office and its strong ties to the B.C. government which made the company attractive to CGI, said Groshong, but there are also government clients in Saskatchewan that will be be new to CGI.
“”We have a big commitment to province of Saskatchewan and (the acquisition) added another 25 (staff) there,”” added Johnson.
Groshong said GDS’s approach to client relationships is similar to that of CGI and provides services including design, implementation, maintenance and support. The company deals mainly with IBM, Microsoft and Oracle products, and recently added J2EE skills.
GDS was responsible for a property assessment and taxation system that was used in a recent City of Calgary implementation which included Oracle products.
Groshong said he will not move over to CGI but assume an executive position with Edmonton-based Valcura International, a subsidiary of GDS that was not purchased by CGI. Valcura is an IT consulting firm that specializes in the property assessment and taxation business.