TORONTO (01/16/2004) - It's been a week of contracts and acquisitions for Montreal-based CGI Group Inc., as the company snagged a big deal with a federal government department and expanded its presence in B.C. with a buy.
On Thursday, the company announced a five-year, C$14.5-million (US$11.2-million) dollar outsourcing agreement with the Canadian Department of Justice in Ottawa and on Wednesday the firm acquired certain assets of Edmonton-based GDS and Associates Systems Ltd., increasing its presence in Western Canada.
As per the agreement, CGI will be providing help desk, on-site support, network management and equipment maintenance services for the Justice Department, and if the Department is satisfied with CGI, there is a possibility the contract could be extended for another six years, said Eileen Murphy, spokesperson for CGI in Montreal.
Previously, CGI had participated in short-term projects and provided consulting services for the Department but had not provided it with outsourcing services, Murphy added.
About 13 per cent of the company's revenue derives from government contracts, the firm said. CGI's Ottawa business unit employs about 1,000 people and focuses primarily on the government sector, while the company currently only has the same amount operating in the entirety of Western Canada.
That's one reason why the company is expanding its presence in Western Canada through the purchase of the B.C. operations of GDS and Associates Systems. The purchase also included most of the company's Saskatchewan operations and part of its Alberta operations.
As a result, CGI now has two offices in B.C. -- one in Victoria and one in Vancouver -- a presence the company was previously lacking.
With the acquisition, CGI will take on 61 employees from GDS and Associates, who are connected with contracts the organization had within provincial government.
"Because we're in the business of selling grey matter, we basically bought 61 professionals and the relationships they had with the B.C. government," Murphy explained. "This is a good time for this acquisition because since the B.C. government changed two years ago, they're being more open to public-private partnerships."
While the financial details of the acquisition were not disclosed, CGI indicated the deal would add $6 million to its annual revenue.
GDS and Associates, however, has no plans to sell off the remainder of the company located in Alberta and Saskatchewan, said Willis Groshong, president of GDS in Edmonton.