CGI Group Inc. announced last week that it will acquire (NYSE: GIB; TSX: GIB.A) Stanley Inc. (NYSE: SXE) for a cash tender offer at $37.50 per share, a total of $1.07 billion.
CGI is funding the acquisition with cash on hand and extant credit facilities, and the transaction has been unanimously approved by both companies' boards of directors. This acquisition is CGI's largest to date and with it, CGI Federal will join a short list of IT contractors with more than $1 billion in revenue.
“The acquisition of Stanley is in line with our Build and Buy profitable growth strategy, and is consistent with our commitment to continue expanding our footprint in the strategic U.S. market and specifically in the U.S. federal market,“ said Michael E. Roach, President and CEO at CGI.
He said this acquisition is the fruit of “our ongoing search for the right acquisition at the right time and at the right price.“
“This is a milestone day for both CGI and Stanley. Joining forces with Stanley will allow us to better serve our clients,“ he added. “Stanley is the right acquisition“¦the time is right. Our U.S. operations are growing at a double-digit rate“¦the price is right and fair.“
Donna Morea, President of CGI's U.S., India, Europe and Asia business, said that “after the acquisition is closed, about half our business will be in this important federal government market. Stanley also offers CGI more depth and breadth and these capabilities and expertise will of course continue to benefit our federal clients.“
Industry expert Renny DiPentima said of the acquisition, “I think this is an excellent acquisition by CGI, bringing together the strengths of both companies to address the government market. Phil Nolan and his team have built an outstanding company at Stanley and, combined with CGI, should be formidable competitors in the U.S. market, in general, and the Federal market, specifically.“
Stanley's 5,000 professionals will join CGI when the deal closes, expected in fall of 2010.