CGI to swoop for UK apps services specialist BJSS

CGI has unveiled plans to acquire BJSS, an applications services specialist based in the UK with more than 2,400 employees. The share purchase transaction is expected to close in February, while the value of the deal has not been disclosed.

PAC has followed BJSS’ progress closely for a number of years. It burst onto the scene as one of the prominent players among the wave of companies that rose rapidly on demand for home-grown development teams to support clients’ initial transition to agile models.

The firm also proved highly successful at navigating the UK Government’s Digital Outcomes and Specialists procurement frameworks which were designed to open the doors for smaller suppliers to engage with public sector bodies. It has built good relationships with the likes of the National Health Service, as the pace of digital transformation has continued to build momentum following the pandemic (indeed, BJSS played a key role in the development of the NHS App as part of the Covid digital response and management strategy).

Today, BJSS’ portfolio has built on its core software development and engineering services to incorporate data and AI services, cloud migration (it has alliances with all three US hyper-scalers), sustainability and cyber security. The company also runs a separate digital design agency called SPARCK.

In the year ending April 2023, BJSS posted a 15.7% increase in revenue to £300.7m, which was partly underpinned by ongoing regional expansion into the US and Australia. Revenue from the UK Government declined as some large projects wound down, although this was offset by strong demand across its commodities, retail and healthcare customers. Operating profit margin fell slightly to 18% from 22% (in comparison, CGI’s most recent EBIT margin for its combined UK and Australia unit was 15%).

So how does this fit with CGI UK’s business? Pretty well, is our view at PAC. BJSS will help to round out CGI’s applications services portfolio and skills base serving its core public sector market, enhancing its legacy modernization and critical system engineering proposition. It will also further extend CGI’s reach in the NHS as it prepares to unveil a new ten-year strategy cycle that will put the harnessing of data and modern technology platforms at its heart. CGI is enjoying an impressive run of its own in the healthcare space with a recent £75m, 10-year partnership with Hywel Dda University Health Board to transform healthcare services across Mid and West Wales.

CGI has been picking up momentum in the UK commercial sector as well, and BJSS will add new logos and domain specialists in markets such as financial services and retail. With its headquarters in Leeds, BJSS will also reinforce CGI’s proximity model which is built around regional hubs that provide a local sales and delivery face for clients. This model has proved to be a differentiating factor for CGI on many recent wins and it now has a total of 26 locations across the UK.

The deal would represent CGI’s largest acquisition in the UK since the Logica deal all the way back in 2012. Interest in BJSS has been high from other suitors for some time and CGI is set to secure one of the largest and more dynamic players among the UK’s domestic vendor landscape.