CGI Group Inc. (CGI) (TSX: GIB.A; NYSE: GIB) today announced the signing of a binding memorandum of understanding (MOU) for the acquisition of the Underwriters Adjustment Bureau Ltd. (UAB) with an annualized revenue run rate of approximately CDN$100 million. The acquisition is expected to close on January 1, 2003 when the terms and conditions will be finalized. The purchase price is CDN$53 million and the transaction is expected to be accretive to CGI's fiscal 2003 earnings. The acquisition of UAB significantly expands CGI's capabilities of its insurance and business process services units.
Founded in 1951, UAB is Canada's only "One-Stop-Risk-Shop", providing claims management, underwriting and actuarial services for the property and casualty (P&C) insurance industry. Additionally, through its KeyFacts subsidiary, UAB also offers attending physician statements, investigation and surveillance services, real estate maintenance services and pre-employment services to life and health insurers. With operational headquarters in Toronto, UAB and subsidiaries employ professionals Canada-wide. UAB is collectively owned by a group of shareholders, many of whom are also clients of UAB and CGI. Clients include insurers such as CGU, ING Canada and Royal & SunAlliance. Beyond insurance companies, UAB's clients include the Ontario and British Columbia provincial governments and the Nuclear Insurance Association of Canada.
"In order for UAB to reach its full potential, we needed to align ourselves with a large, established IT and business process outsourcing (BPO) player. With this acquisition, we see a lot of opportunities for strategic growth with a quality-driven, dynamic team committed to BPO expansion," said Byron Messier, chairman of UAB.
Serge LaPalme, president and chief executive officer of UAB added: "With our long insurance history coupled with our firmly established relationship with CGI, the fit was natural. We see how the industry is rapidly evolving and know that keeping our technology leading-edge is what CGI is well-positioned to do."
Michael Roach, president and chief operating officer for CGI added: "The acquisition of UAB is another very important milestone in CGI's growth commitment to the insurance vertical and to expanding our BPO capability. With this acquisition, CGI will be gaining a large base of extremely well known industry experts with deep client relationships. UAB will become an integral part of our new North American vertical focused on bringing world-class BPO-based solutions to the insurance sector. We see many synergies between our two firms that when leveraged will bring increased value to our clients and shareholders. I would also like to warmly welcome Serge LaPalme, his leadership team and all UAB professionals to CGI."
Clients within the financial services sectors account for 40% of CGI's revenue. Some 3,000 CGI professionals are dedicated to insurance clientele, which include Allianz, Sun Life and Premier Insurance. CGI's insurance areas of expertise are located mostly in Richmond Hill, Ontario, Andover, Massachusetts, and London, England. Revenue from business process outsourcing services represents approximately 16% of CGI's total revenue.
About CGI
Founded in 1976, CGI is the fourth largest independent information technology services firm in North America, based on its headcount. CGI and its affiliated companies employ more than 14,600 professionals. CGI's annualized revenue run-rate totals CDN$2.3 billion (US$1.5 billion). As at September 30, 2002, CGI's order backlog currently totals CDN$10.4 billion (US$6.7 billion). CGI provides end-to-end IT services and business solutions to more than 3,000 clients worldwide from more than 60 offices. CGI's shares are listed on the TSX (GIB.A) and the NYSE (GIB). They are included in the TSX 100 Composite Index as well as the S&P/TSX Canadian Information Technology and Canadian MidCap Indices.
Website: www.cgi.com
Forward-Looking Statements
All statements in this press release that do not directly and exclusively relate to historical facts constitute "forward-looking statements" within the meaning of that term in Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended. These statements represent CGI Group Inc.'s intentions, plans, expectations, and beliefs, and are subject to risks, uncertainties, and other factors, of which many are beyond the control of the Company. These factors could cause actual results to differ materially from such forward-looking statements.
These factors include and are not restricted to the timing and size of contracts, acquisitions and other corporate developments; the ability to attract and retain qualified employees; market competition in the rapidly-evolving information technology industry; general economic and business conditions, foreign exchange and other risks identified in the Management's Discussion and Analysis (MD&A) in CGI Group Inc.'s Annual Report or Form 40-F filed with the SEC, the Company's Annual Information Form filed with the Canadian securities authorities, as well as assumptions regarding the foregoing. The words "believe", "estimate", "expect", "intend", "anticipate", "foresee", "plan", and similar expressions and variations thereof, identify certain of such forward-looking statements, which speak only as of the date on which they are made. In particular, statements relating to future revenue from outsourcing contracts are forward-looking statements. CGI disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements.
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For more information:
CGI:
Investor relations
Julie Creed
Vice-president, investor relations
(312) 201-4803
Ronald White
Director, investor relations
(514) 841-3230
Media relations
Eileen Murphy
Director, media relations
(514) 841-3430
