Compugen beefed up its presence in Quebec City Wednesday with the purchase of Logicil, its second acquisition in the region this year.
Financial terms of the deal were not disclosed. Logicil, which specializes in installation, information security consulting, and hardware expertise for consulting on equipment purchases, will operate under the Compugen name but will remain in Quebec City. Compugen said it expected no layoffs following the transaction, and Logicil’s president, Gaétan Labrecque, will become its local director of professional services.
In January, Compugen paid an unspecified sum to acquire the assets of Groupe Conseil LSGI, a 10-person shop based in Montreal which provided products from Citrix and VMWare to customers in the health-care sector, among others. Logicil, on the other hand,
Offers expertise in high-end systems, Exchange messaging, security and Microsoft’s SharePoint Portal product.
“They covered an area of infrastructure that was complementary to our area of work and we had in fact used them in the past as a company that we would leverage their expertise,” said Harry Zarek, Compugen’s chief executive.
Zarek said Compugen already had a substantial business in Quebec City with the provincial government and commercial clients, but Logicil will bring a substantial customer base of its own.
“We want to make sure to continue to allow them to focus on what they’re best at, which is customer service and so on,” he said. “We can then bring in the back office processes – standardized billing, standardized support and administrative areas that we’ve already invested in.”
IDC Canada analyst Darren Bibby said channel players are seeing a lot of consolidation in order to offer a broad enough portfolio around areas like enterprise resource planning and customer relationship management. They are also facing increased pressure from firms such as CGI and Bell Canada, which have both made substantial acquisitions of their own in the last few years.
“I think organically it’s hard for some of these big players to grow as fast as their shareholders are demanding,” he said, adding acquisition isn’t the only option. “If a partner like Compugen isn’t going to buy someone, there’s also a lot of partner-to-partner networking going on. It may not be as big a deal as an acquisition, but it can meet the same market demands.”
Zarek said competition within the Microsoft partner community is evolving given the software firm’s increasingly broad product line. Instead of merely focusing on OS deployments, for example, he said companies like Compugen were working on projects involving SharePoint, Live Communication Server and even search.
“Those are emerging as growth areas,” he said. “Our opportunity is to get tooled up and deliver those professional services (around them).”
Compugen ranks 6th on CDN’s Top 100 Solution Providers with annual revenues of roughly $225 million.
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