CGI and Deloitte Consulting today announced that they have signed a letter of intent based upon which CGI would acquire the business of DRT Systems International. DRT Systems International, with annual revenue approaching US$ 100 million, is an independently operated business unit of Deloitte Consulting that provides systems development and systems integration in the U.S. and Canada.
"We are pleased that DRT Systems' team of 975 highly talented people will be joining us," said Serge Godin, CGI's Chairman and CEO. "This is in line with our stated goal to increase our presence in the U.S. market and provides us with the critical mass and strong team required to become an important player in the U.S. market for large systems integration and outsourcing contracts. Our joining forces allows us to strengthen our Canadian operations while vastly increasing our U.S. presence overnight, with a combined network of 20 offices in most major U.S. cities, which we can leverage to develop our global service capabilities."
"DRT Systems has been effective at providing technology services to companies throughout the U.S. and Canada. As they evolved as a separate operating entity from Deloitte Consulting, it became apparent that, based on their culture and organizational structure, a sale to CGI would be mutually beneficial," said Pat Loconto, CEO of Deloitte Consulting. "The sale of DRT Systems will have no effect on the world-class enterprise transformation and systems integration services that Deloitte Consulting is committed to providing for our clients around the world. As one of the top systems integrators globally, Deloitte Consulting's commitment to a very different approach has enabled us to grow at over 40 percent during the last year and to continue to provide results our clients can build on."
Mel Steinke, President and CEO of DRT Systems International, added: "We are excited about the prospect of joining CGI. We believe we can add tremendously to CGI's success and help CGI become a global market leader."
With the acquisition of DRT Systems, CGI will generate approximately 18% of its revenue in the U.S., up from 9% currently. Its U.S. network will include offices in Albany (NY), Anaheim (CA), Andover (MA), Atlanta (GA), Boston (MA), Canton (MA) Chicago (IL), Cleveland (OH), Dallas (TX), Houston (TX), Kansas City (KS), Los Angeles (CA), Melville (NY), Minneapolis (MN), Nashville (TN) and New York (NY).
The transaction is expected to close on or around June 1, 1999 and is subject to successful completion of due diligence and negotiation of a definitive purchase agreement.
Deloitte Consulting is one of the world's top management consulting firms, providing services to transform your entire enterprise - your strategy, processes, information technology and people. We offer our clients a very different approach, because our highly respectful, flexible, and collaborative working style gives us an unmatched ability to transfer knowledge and skills and generate employee buy-in. In addition, we focus on the realization that changing business processes is necessary to achieve the promised returns from strategy and technology. Our approach enables us to deliver very different results - results clients can count on because they can trust their performance improvements will not unravel once we leave, results they can build on because these improvements make their organization more robust and adaptable to future shifts in the environment. Deloitte Consulting is an integral part of Deloitte Touche Tohmatsu, a global leader in professional services, offering consulting, audit, tax, and related services to clients worldwide.
Based on its annualized revenue run-rate of CDN$1.3 billion, CGI is the sixth largest independent information technology consulting firm in North America and the largest in Canada. It provides end-to-end IT services and business solutions to some 2,000 clients in the United States, Canada and 20 countries around the world. CGI has 9,000 professionals and an order backlog totalling approximately CDN$7 billion. CGI recently announced that it had signed a letter of intent pertaining to a ten-year agreement, renewable for another ten-year period, with BCE Mobile to provide the wireless carrier with information technology services. In regard to this agreement, due diligence is proceeding as planned. Separately, CGI and two other partners were selected by Portugal Telecom to negotiate a long term full IS/IT service partnership. In addition, the company currently has proposals outstanding for another CDN$4 billion in potential large contracts. CGI's shares are listed on the New York Stock Exchange (GIB), as well as on the Toronto and Montreal exchanges (GIB.A). They are included in the Toronto Stock Exchange's TSE 300 Composite and TSE 100 indexes. Web site: www.cgi.ca.
All statements contained in this or any other press release of CGI Group Inc., or in any document filed by the Company with the U.S. Securities and Exchange Commission, or in any other written or oral communication by or on behalf of the Company, that do not directly and exclusively relate to historical facts, constitute "forward looking statements" within the meaning of the U.S. Private Securities Litigation Report Act of 1995. These statements represent the Company's expectations and beliefs, and no assurance can be given that the results described in such statements will be achieved.
This press release may contain forward looking statements that involve a number of risks and uncertainties, including statements regarding the outlook for the company's business and results of operations. There are a number of factors that could cause actual results to differ materially from those indicated. Such factors include, without limitation, the various factors set forth in the Company's annual report or Form 40F filed with the SEC and its Annual Information Form filed with Canadian securities commissions, which important factors are included here by reference.
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For more information:
CGI
Ronald White
Investor and Media Relations
(514) 841-3230
ronald.white@cgi.ca
Deloitte Consulting
David Mandell
(212) 492-4329
dmandell@dttus.com
