Cegeka moves to acquire Computer Task Group

Belgian IT services group Cegeka has unveiled plans to acquire Computer Task Group (CTG), a US-based vendor with a significant presence in Europe.

The $10.50 per share cash approach values CTG at $170m and if successful, would take Cegeka’s annual sales past the €1bn mark in 2024.

The move is an interesting one, and it isn’t the first time a company has shown interest in CTG. Just three years ago, Assurance Services Group made an approach for CTG at $7.00 per share in cash (valuing the business at $103m) that failed to receive backing from the board.

The approach for CTG would help Cegeka build on its recent momentum. Last year, the company racked up its 19th consecutive year of revenue growth, with sales up 18% to €832m. A good part of this development has been driven by an aggressive M&A strategy, with other recent deals including BuSI, Avento, Solver, DexMach, and Westpole Italy. However, the move for CTG would be Cegeka’s biggest acquisition to date.

CTG has established a strong global presence since its inception in the 1960s. The company resells IT equipment and provides a broad range of IT services to clients in industries such as healthcare, life sciences, energy & utilities, manufacturing, retail, public sector, and financial services. The deal will also broaden Cegeka’s presence in EU institutions and UK central government agencies such as the Home Office.

By integrating CTG’s offerings into Cegeka’s existing lineup, the company can diversify and complement its service portfolio, particularly in business process transformation, while complementing in cloud, platform engineering, and software services. Both companies will further complement each other in their focus on the development of high-growth areas (e.g., cloud, cybersecurity, data & analytics, automation, Microsoft Dynamics and Power Platform).

Both Cegeka and CTG have international coverage, albeit Cegeka is more Europe-oriented. The acquisition would lead to an extended global footprint, enabling both to serve clients more effectively on an international scale. Cegeka gains a wider presence in the US, India, and Colombia while CTG expands opportunities within Europe as it is currently largely focused on the Benelux, France, and the UK. The acquisition would cement Cegeka’s number one position in PAC’s IT services rankings in Belgium and put it on track for a top ten ranking in the Netherlands.

Additionally, CTG will benefit from Cegeka’s nearshore services situated in the Netherlands, Belgium, Romania, Moldova, Greece, and the Czech Republic for software and mobile app development, application maintenance services, and remote infrastructure management.

Cegeka’s 6,000 employees combined with CTG’s 3,000 employees creates a substantial talent pool and one which is better served to ride the trend towards more full-stack IT services solutions as clients look to accelerate their time-to-value. We will follow the progress of the deal with interest.