See the full list

05 Jun Alithya – the Company Rivalling CGI

Richard Dufour La Presse

Unknown to the general public and investors in the field of information technology despite its growing strength with digital technology, Quebec’s Alithya is about to become a talking point on Wall Street and Bay Street.

Alithya’s big boss, Paul Raymond, will be in New York near the end of the summer to sound the NASDAQ’s opening bell. As early as September, investors will be able to buy and sell Alithya shares openly as the company, which specializes in the implementation of Oracle management software, will make its debut on the NASDAQ and on the Toronto Stock Exchange.

“We will become only the seventh company from Quebec on the NASDAQ,” said Paul Raymond.

This former CGI Group executive explains that he’s been wanting to list Alithya’s shares on the Stock Exchange for a few years now in order to be able to use them as a means to pursue growth through acquisitions. His wish will be granted in the next three months in the wake of the merger announced recently with Edgewater Technologies, a small company in Boston, which is listed on the Stock Exchange with a market capitalization of approximately $80M USD. The combination of Edgewater and Alithya should translate into an initial market capitalization between $200M and $300M USD upon closing the transaction in the summer.

“This is a creative transaction, a bit like a reverse takeover that will give us 58% control over the resulting company. We will transfer the administrative operations to Quebec. Shares with multiple voting rights will allow us to maintain control here for a very long time,” says Paul Raymond.

This transaction with Edgewater is the sixth carried out by Alithya since its creation, 26 years ago, by former Desjardins employees. Paul Raymond explains that the merger with Edgewater makes accelerating the strategic plan possible.

$330M CAD

The combined annual revenue of the two companies, which should fall within a range of $340M to $360M CAD next year

The goal is to double revenues within three to five years.

During this same period—if everything goes according to plan—the gross profit margin is expected to rise from 6% today to between 9% and 13%.

“The information technology services market is very fragmented. We are the second largest information technology company in Canada [after CGI]. There are no other companies operating Canada-wide. There are many local companies. We want to acquire quality local companies with a niche market,” says Paul Raymond.

“More favorable”

Having spent twenty years in various leadership positions at CGI before taking control of Alithya, seven years ago, he says the idea behind listing on the Stock Exchange can be easily understood from a financial perspective.

“When we perform acquisitions today, we pay between 5 and 7 times gross profit and companies like ours on the Stock Exchange have a 12-fold valuation. Acquiring as a private company has a significant dilution effect. We determined that it would, therefore, be more favorable to be listed on the Stock Exchange in order to make acquisitions in the United States. ”

Paul Raymond argues that the larger a consultancy firm is, the more it is apt to offer its services for major projects at a flat rate or fixed price for which it becomes possible to generate attractive margins.

“We often use CGI as a point of reference, a bit like WSP uses SNC-Lavalin as a reference point. When I started here, six years ago, we had a turnover of $30M and razor-thin profit margins. ”

— Paul Raymond, CEO of Alithya

Although much smaller than CGI, Alithya is similar in many ways. But Paul Raymond prefers to be the “first Alithya rather than the next CGI.” The 54-year-old CEO adds that he only intends to build. And, indeed, he cites the example of WSP Global (formerly Genivar), the Montreal engineering firm. “They perform plenty of acquisitions internationally. It is a great model to follow. ”

North America is currently the primary market for Alithya to develop. And the merger with Edgewater helps establish a presence in the United States.


Business: IT services

Founded: 1992

Head office: Quebec

CEO: Paul Raymond

Largest shareholders:  Desjardins, Industrial Alliance, Investissement Quebec

Number of employees: 2,000+ (including 400 from Edgewater)

Turnover: $260M USD (includes income from Edgewater)

Gross earnings: $16M USD, or 6% (includes Edgewater)


  • A dynamic company that presents itself as a consolidator in a fragmented field
  • The largest company in its field in the country after CGI
  • Expertise in integrating acquisitions
  • Upcoming listing on the Stock Exchange, which will grow its visibility and provide the means to pursue acquisitions


  • Recruiting challenges due to a shortage of skilled labor
  • Limited presence in the western part of the country and in the United States

Read the original article here.