COGNICASE announces acquisition of Raymond Chabot Grant Thornton's
enterprise resource planning software business
- The agreement includes a 3-year outsourcing contract valued at over
US$1.1 million -
MONTREAL, Canada, July 7, 1998 - COGNICASE Inc. (NASDAQ: COGIF, TSE:COG)
today announced that it has acquired the enterprise resource planning (ERP)
software implementation business of Raymond Chabot Grant Thornton, one of
Quebec's largest accounting and management consulting firms. The Company
also announced that it has entered into a 3-year outsourcing agreement with
Raymond Chabot Grant Thornton that is valued at over US$1.1 million.
With this transaction, COGNICASE will acquire an experienced 15-member team
of ERP experts and has entered into a strategic marketing alliance that
will enable COGNICASE to accelerate its penetration of the high-growth ERP
market. COGNICASE expects that the agreement will generate a minimum of
$US10.0 million of revenues over the next three years with significant
growth potential. Under the terms of the agreement, Raymond Chabot Grant
Thornton will promote COGNICASE's software implementation services to their
customer base.
In addition, effective immediately, COGNICASE will assume full
responsibility for most of Raymond Chabot Grant Thornton's information
technology (IT) supporting the administrative functions under a 3-year
outsourcing agreement estimated at over $US1.1 million.
"This agreement clearly demonstrates that our customers see COGNICASE as a
preferred business partner and a leading player in the IT services market,"
commented Ronald Brisebois, President and Chief Executive Officer of
COGNICASE. "The ERP market is the fastest growing IT segment with industry
experts predicting a 40% increase in total revenue. This acquisition gives
COGNICASE a running start in the software implementation field and expands
our software expertise and our range of IT consulting services." He
continued, "This agreement not only enhances our cross-selling
opportunities across COGNICASE, but it will enable us to leverage the
extensive marketing expertise of Quebec's leading consulting firm. This is
truly a win-win partnership agreement."
Mr. Serge Saucier, President of Raymond Chabot Grant Thornton stated
"COGNICASE is an industry leader and we have chosen them as our IT partner
not only because of their strong track record in customer satisfaction, but
also due to their commitment to being a comprehensive provider of IT
software and services. COGNICASE's expertise and dedication will provide
the ERP unit with the support necessary to realize the full potential of
this business."
Concurrent with their IT alliance, the companies also jointly announced the
resignation of Raymond Chabot Grant Thornton as auditors for COGNICASE, in
line with securities regulations and CICA policies. They will maintain
their current relationship in the areas of accounting, tax and management
consulting services. COGNICASE will appoint new auditors in the very near
term.
With the integration of this acquisition, COGNICASE now has more than 1,100
employees and a revenue run rate of over US$80 million. This compares with
reported revenues of US$6.6 million for the fiscal year ended September 30,
1997. COGNICASE Inc., founded in 1991, is an international provider of
value-added software solutions and information technology (IT) consulting
services. The Company's services encompass three core areas: Software
Solutions including Year 2000 remediation and technology migration
projects, Business IT services and Business IT partnerships, including
outsourcing. Through automation, reusability, and high quality IT
resources, COGNICASE delivers reliable, cost-effective and timely solutions
that generate added value for customers, employees, and shareholders.
Founded in 1948, Raymond Chabot Grant Thornton is the largest Quebec-based
firm offering auditing, taxation, management consulting and turnaround
services. The firm's professional expertise also covers financial
consulting, organizational performance and strategy, human resources
management, real-estate consulting and government affairs management. With
fees for services of Cdn$132 million in 1997, offices in 60 cities and a
team of over 1,300 employees, Raymond Chabot Grant Thornton is considered
the Quebec leader in its sector of activity.
This new release contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 (US), which
involve risks and uncertainties. The Company's actual results may differ
significantly from the results discussed in such statements. Certain
factors that could cause actual results to differ materially from those
discussed in such forward-looking statements include the ability of the
Company to (i) successfully integrate business acquisitions (ii) take
advantage of opportunities on the Year 2000 market in the short term and
(iii) provide software maintenance and platform migration solutions outside
the Year 2000 market, as well as the risks described in the Company's final
prospectus dated October 2, 1997 filed with the SEC, the OSC and QSC in
connection with its Public Offering, which factors are incorporated herein
by reference.
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For further information, please contact:
COGNICASE RAYMOND CHABOT GRANT
THORNTON
Marc Lamy Jacques Gilbert
Chief Financial Officer Director, consulting
services
514-866-6161 514-878-2691
lamm@cognicase.ca gilbert.jacques@rcmp.com
Web site: www.cognicase.ca
COGNICASE press releases are available at: cdn-news.com
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