BT Engage IT is taking over Business Systems Group’s (BSG’s) £20m-a-year product supply business.

London-based HP Gold partner BSG was acquired by healthcare IT services firm Advanced Computer Software (ACS) for £15.5m in June.

But following a strategic review, ACS has decided it wants BSG to focus on managed services and has hived off its product supply business to BT Engage IT via a three-year outsourcing deal.

26 BSG employees will transfer to BT Engage IT, which is the midmarket reseller arm of BT, as part of the deal.

In an email leaked to CRN, BT Engage IT sales director Nick Wiltshire revealed that BSG’s supply business is currently worth £20.5m annually.

“Our aim is to not only retain as much of the £20.5m per annum as possible, but to grow it by offering these new clients our extended portfolio and professional services,” he said.

“I believe this is a great piece of business for our company and who knows, maybe a model we can replicate in the future.”

ACS also expects to profit from the deal as BSG will receive a percentage of the gross margin achieved by BT each year, subject to a minimum of £0.5m per annum.

It added that the proceeds would be used to fuel its growth strategy.

Vin Murria, chief executive of ACS said in a statement: “[The] review quickly identified that BSG's core businesses of managed services and solutions will support ACS' long term strategy of organic and acquisition growth but that the infrastructure business is better served through a partnership with BT Engage IT.

“This agreement allows us to continue focusing on the growth of managed services whilst still supporting customers in their infrastructure needs.”