Selling its U.S. commercial IT business will allow Calian Group to focus on opportunities in growing areas such as defence and space, the firm’s CEO says. Calian announced Wednesday it has signed a deal to sell its U.S. commercial IT business based in Houston to Trace3, a California-based technology consultancy. Under the deal, Trace3 will […]
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Selling its U.S. commercial IT business will allow Calian Group to focus on opportunities in growing areas such as defence and space, the firm’s CEO says.
Calian announced Wednesday it has signed a deal to sell its U.S. commercial IT business based in Houston to Trace3, a California-based technology consultancy. Under the deal, Trace3 will pay about $43 million in cash and assume liabilities totalling about $17 million.
Calian chief executive Patrick Houston said Thursday the Kanata-based company has been reviewing its product portfolio for the past year and the sale “is kind of the culmination of that whole exercise.”
Houston stressed the business is a money-maker, estimating it has generated about $30 million in net profits since Calian entered the U.S. commercial IT market with its $38-million acquisition of Houston-based Computex in early 2022.
“From a return perspective, I think it was a success,” he said in an interview with OBJ.
But Houston suggested he and the company’s senior leaders see more upside in other growing business lines such as military training software, satellite components and other products and services that cater to the defence and space industries.
“I think it allows us to just focus on all the other places where we’re seeing a ton of momentum — in defence, space,” he said of the decision to offload the IT business, which had nearly 100 employees and generated about $80 million in annual revenues, or almost 10 per cent of Calian’s total sales.
“I think there's value in being simpler and more focused. I think this helps us get there.”
Calian’s acquisition of Computex four-and-a-half years ago was its first M&A deal in the U.S. Houston said the transaction helped Calian become less “Canadian-focused,” noting the company has acquired another U.S. firm as well as four companies in Europe since then.
After being a keen buyer of companies over the past decade, Calian has flipped the script this time around. But Houston suggested it won’t be a regular occurrence.
“Certainly we’re more in build mode than portfolio-trimming mode,” he said. “But at the same time, we have grown pretty significantly. Every once in a while, you need to look and say, ‘Could you trim and refocus and get more momentum going in one direction?’ I think that’s what this exercise was. I don’t think you're going to see a lot of this from us. This was more of an aberration.”
