Compugen, a Richmond Hill, Ontario-based IT services provider, is seeking to acquire Canadian peers as it seeks to expand its products and services portfolio, founder and CEO Harry Zarek said.

Potential targets should have at least CAD 100m (USD 73m) in annual revenue but be smaller than Compugen, which will finish 2023 with more than CAD 800m in revenue, said the executive, who owns a controlling stake in the business.

Targets must also have management teams that are curious, collaborative, and driven, Zarek said. Compugen is especially interested in companies that only serve businesses with more than 100 employees, particularly those operating hundreds or thousands of brick-and-mortar retail units across Canada, he added.

Acquisitions could also help the company expand into the US, the CEO said, without offering more details. Compugen handles all M&A work in-house, he noted.

Asked how the company would pay for acquisitions, the executive would only say it was “flexible” about financing.

Compugen plans to actively start searching for potential targets around mid-2024, when it expects to finish integrating Quebec City-based CPU Service d’ordinateur, which it agreed to acquire on 21 November.

The acquisition gives Compugen “very complementary” customers, including large retailers and Quebec provincial and municipal government healthcare and education agencies, he said. It also adds warehouse logistics capabilities in Quebec and other parts of Eastern Canada, which complement Compugen’s existing warehouses in Richmond Hill and Calgary, Alberta, he added.

Compugen, whose business segments consist of software, products, professional services, and technical services, has about 2,000 medium-to-large organizations customers, in both the commercial and public sectors, he said.

The company has 12 offices across Canada, including a growing presence in Western Canada, the executive said.

It has made two M&A deals in the last eight years. In 2015 it acquired some assets from Toronto-based Metafore Technologies and in 2019 made a strategic investment in Ottawa-based, indigenous-led FoxWise Technologies.

Compugen intends to remain independent and has no interest in raising external equity capital, going public, or selling itself, Zarek said.

It has about 1,800 employees, including about 300 it will add from CPU.