CGI to Acquire Stanley
May 7, 2010 by admin · Leave a Comment
Fairfax and Arlington, Virginia, May 7, 2010 - CGI Group Inc. (NYSE: GIB; TSX: GIB.A), a leading provider of information technology and business processing services, and Stanley Inc. (NYSE: SXE), a premier provider of information technology services and solutions to U.S. defense, intelligence and federal civilian government agencies, today announced that they have entered into a definitive merger agreement for CGI to acquire Stanley through a cash tender offer at $37.50 per share, representing an enterprise value of approximately $1.07 billion.
The per share purchase price represents a premium of 23.3% over Stanley’s 30-day volume weighted average stock price and 38.3% over its 60-day average.
The transaction will be funded from CGI’s cash on hand and existing credit facilities. The proposed transaction has been unanimously approved by the board of directors of both companies. In addition, certain Stanley board members and executive officers have signed a voting agreement in support of the offer.
This strategic acquisition brings additional scale to CGI’s U.S. operations, which will account for nearly half of CGI’s global revenue. The powerful combination of CGI’s U.S. federal business unit and Stanley brings additional resources and capabilities to the U.S. Government market and marks CGI Federal’s expansion into the U.S. defense and intelligence markets. With this acquisition, CGI Federal joins a select list of Federal 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. It is also consistent with our commitment to bring increased value to our clients and employees. From an investor perspective, this transaction will be accretive to GAAP earnings per share within the first 12 months,” said Michael E. Roach, President and CEO, CGI. “CGI has a strong culture and market momentum that will provide additional professional opportunities and growth for all our employees, including the Stanley professionals, whom we warmly welcome to CGI,” added Roach.
Philip O. Nolan, Chairman, President and CEO of Stanley commented: “This is a great transaction for all stakeholders, as it provides Stanley employees with additional growth opportunities as part of a global IT services player and our clients with a powerful combination of highly-skilled employees and additional scale to enhance value. For our shareholders, this transaction provides attractive returns and, accordingly, our Board intends to recommend that Stanley shareholders accept this offer.”
“Joining forces with Stanley is a critical element of our U.S. growth strategy. The combination of Stanley’s defense and civilian IT and BPO services with CGI’s end-to-end capabilities, mission-critical solutions, and strong client relationships cements our position as a player of scale across the entire U.S. Federal Government,” commented Donna Morea, President U.S., Europe and Asia, CGI. “Together, CGI and Stanley are a great cultural fit, sharing deep industry knowledge, a strong commitment to employees, and a reputation for operational excellence.”
Transaction Highlights:
- Based on calendar 2009 results, the combined companies would have total revenues of approximately $4.5 billion, 31,000 employees and a booked backlog of more than $13.5 billion, representing approximately 3 times annual revenue.
- Stanley will become part of CGI Federal Inc., a wholly-owned subsidiary, which currently provides services to the U.S. Federal, defense, intelligence and civilian agencies.
- Post-transaction, CGI Federal will have approximately 7,000 professionals and $1.2 billion in annual revenue. Its client base will be a diversified and balanced blend of 55% defense and intelligence and 45% U.S. Federal civilian agencies. CGI Federal will continue to be led by its current President, George Schindler.
- The consolidated company will continue serving all three branches of government, 12 Cabinet-level agencies, the four military services, and a broad range of intelligence and national security agencies.
via CGI
