Accenture and CGI buy technology consulting firms in North America

11 September 2017 4 min. read

Accenture and CGI have each completed acquisitions in North America. Accenture has purchased VERAX Solutions, a Toronto-based technology and systems-integration consulting firm that serves the financial services sector, while CGI has bolted Summa Technologies on to its operations, obtaining around 200 IT consultants from the US firm.

Founded in 2003, VERAX employs around 180 people at offices in Toronto and Halifax. Serving leading banking, insurance and capital markets institutions, VERAX delivers IT consulting initiatives across the full range of financial-services lines of business, including wealth management, brokerage and mutual funds, mobile and online banking, retail and commercial banking, and insurance and capital markets.

Now, in a deal for an undisclosed fee, consulting industry players Accenture have acquired the company. The addition of VERAX’s proven technology and systems-integration expertise across the financial services sector is aimed at complementing Accenture's own consulting and technology capabilities in Canada. It comes as the latest in a number of acquisitions over the course of 2017, the year during which Accenture set out plans to expand their operations by way of investing $1.8 billion in merger and acquisition (M&A) activity.

Verax is now part of Accenture

According to Robert Vokes, Managing Director of Accenture's Financial Services practice in Canada, the deep technical knowledge of VERAX and strong culture of collaboration to deliver results were key factors behind the deal. "We believe [VERAX] will greatly complement and enhance the breadth and depth of our financial services capabilities in Canada,” Vokes said. He concluded that, “The combination of Accenture and VERAX will help enable our clients to react even more quickly and with even more confidence, as banks face increased pressure to adjust to new digital capabilities, new regulatory requests, and increased competition."

Sid Thomas, VERAX's CEO and founder, meanwhile said, of the deal "We are excited to join Accenture, whose scale, scope and reputation for excellence will benefit our clients and will provide an opportunity for our employees to escalate their careers and enhance the benefits they deliver to our clients."

Further global deals

Elsewhere, Canadian consulting firm CGI has also acquired Summa Technologies for an undisclosed sum. The 200-person IT consultancy – which has been featured seven times in the annual Inc. 5000 ranking of fastest growing privately listed companies in the US – specialises in providing software development expertise. The company serves banking and financial services, retail, manufacturing and healthcare, CGI indicated. Summa has a strong business footprint in the Pittsburgh area, and, according to the Inc. 5000 report for 2017, saw revenues of $35 million last year on the back of 44% growth over the previous three year period.

CGI acquires Summa

Like Accenture, CGI have aimed at raising the bar for competitors by way of an aggressive expansion strategy in 2017. Summa is CGI’s fourth strategic consulting acquisition in the U.S. in the 2017 fiscal year, while CGI Nordic Investments (another CGI subsidiary) is in the process of acquiring Affecto, a provider of business intelligence and enterprise information management solutions and services.

The CGI consulting outfit are presently seeking to expand their operations inorganically to compensate for growing demand, with their parent company CGI Group currently drawing an annual revenue in excess of C$10 billion. Hhowever, they also have an order backlog reportedly exceeding C$20 billion, which, if accurate, means should they expand their capacities rapidly enough, and could potentially double their present revenues. Adding to this growing demand, CGI were awarded a substantial $100 million Identity Management solutions contract by the US government earlier in the year. The firm presently employs 12,000 professionals in 80 cities across 34 American states.

According to a prepared statement from CGI President and CEO George D. Schindler, “Merging with Summa is another step toward fulfilling our strategic objective to double the size of our company through a balanced blend of organic and acquisition growth. Summa adds capabilities, strength, and size to our U.S. business, allowing us to create additional focus in one of our target growth metros.”