Montreal’s CGI Group Inc. (GIB.A) has acquired UK based Logica for $2.7 billion agreeing to take on $499 million of the European firm’s debt as part of the deal. According to the OBJ, Logica’s shareholders were overwhelmingly in favour of the deal, with 99.5 per cent of them voting for the acquisition in July.
The acquisition has allowed CGI become one of the largest IT services provider in the world, employing 72,000 people in 125 offices across 40 countries. The combined pro forma revenues following the deal’s approval now stands at $10.4 billion.
The deal is expected to push GCI’s financial metrics upwards, leading to a 35 per cent increase in company earnings per share, exceeding their projected increase of 25 to 30 per cent. The acquisition is also expected to add approximately $3 per share while also saving the companies a combined $200 million through restructuring.
The acquisition of debt involves 46.7 million subscription receipts from Quebec based Caisse de Depot et Placement du Quebec being converted to Class A shares in CGI.
The reason for the acquisition surrounds CGI’s desire to expand its European presence by picking up an already established player across the pond. TQ congratulates both firms and sincerely hopes that the union is a prosperous one moving forward.
There will be some shuffling of leadership world round in order to integrate new employees and senior management from Logica.
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