CGI Group

History

2012: Purchase of the British Logica

In June, 2012 CGI Group announced agreement signature about purchase of the largest European system integrator Logica. Transaction amount is 2.8 billion Canadian dollars ($2.7 billion). Within the reached agreements of CGI also agreed to undertake obligations for debt repayment of Logica in the amount of 515 million Canadian dollars.

CGI is going to attract to financing of the transaction of 1 billion Canadian dollars due to release additional 46.7 million actions, to take 2 billion Canadian dollars on credit from Canadian Imperial Bank of Commerce, National Bank of Canada and The Toronto-Dominion Bank, about 650 million more Canadian dollars - within the operating credit line.

The offered amount for an action for 59.8% exceeded the cost of securities of Logica at the time of closing of the exchange on May 30, 2012. Transaction amount approximately by 6.6 times exceeds the profit of Logica to a deduction of expenses on payment of taxes, percent and charged depreciation (an indicator of EBITDA) for the 12-month period which came to the end on December 31, 2011.

It is supposed that purchase of Logica will increase the profit of CGI on an action by 25-30%, less expenses on acquisition and integration. As a result of merge the state and annual revenues of the resulting company more than twice will exceed indicators of CGI. The size of the staff of the united company will be about 72 thousand employees placed at offices in 43 countries, and annual revenues - about 10.4 billion Canadian dollars ($9.6 billion).

The new company will be the sixth in value among world IT consultants. By estimates of Reuters, the largest of them are IBM, Accenture, Cap Gemini, Tata Consultancy and Infosys.

"Logica is leading company on providing business and technology services, with the professionals and safe customers betrayed to the case with long-term contracts, - the president and the chief executive officer of CGI Michael Roach commented. - We are sure that we do right thing, buying Logica that we purchase it at the correct price and in due time to create one of the few largest independent providers of complex technology services".

The Board of Directors of CGI unanimously approved the transaction. It is going to complete it by September, 2012, after receiving approval of shareholders and accomplishment of standard procedures. Process of integration of the companies is going to be completed within 3 years^[1].

Notes