Cognicase Inc, the Canadian IT services provider that is in the process of being acquired by domestic rival CGI Group Inc, is winding down its loss-making European operations.
Montreal-based Cognicase said it will take a CAD 12m charge ($7.7m) to shut down its offices in Paris, Brussels and Madrid, which accounted for 13% of its full-year 2001 sales of CAD 405.5m ($261m). This was largely built through acquisition, principally the purchase of French IT consulting firm Groupe Logispace in June 1999 which gave it a base of 120 employees in the region. The company said in July that it was looking for a buyer for the business.
Cognicase president and CEO Ronald Brisebois said the European operation is making a monthly net loss of CAD 1m ($645,000), having made a net loss of CAD 14m ($9m) for the year to September 30. The company is currently considering a CAD 313m ($265m) takeover bid that has already been accepted by its largest client, the National Bank of Canada, which owns a 15% stake in the company.
Meanwhile, CGI continued its acquisitive streak, by announcing the purchase of ERP consultancy ProjExpert, a Montreal-based company specializing in the implementation of Oracle applications. The company has 16 employees and made full-year 2001 revenue of CAD 2.75m ($1.8m).