- CGI signs letter of intent to acquire Montreal-based CDL
- Company finalizes agreement to take 49% equity interest in AGTI
CGI Group Inc. (TSE: GIB.A; NYSE: GIB) today announced it has signed a letter of intent to acquire Groupe-conseil CDL Inc. Groupe-conseil CDL, with annual revenue of CDN$6.4 million, is a Montreal-based IT consulting firm with 45 employees, specializing in the implementation of J.D. Edwards enterprise resource planning (ERP) solutions. The transaction, expected to close in mid-December, is accretive to CGI's net earnings and, as per CGI policy, it is also accretive to the Company's earnings before amortization of goodwill (cash earnings).
CGI also announced the closing of a transaction whereby it has taken a 49% equity participation in AGTI, a Montreal-based information technology consulting firm with more than 225 senior consultants. AGTI generates 40% of its revenues in the telecommunications sector; 25% in the financial services industry; 20% in governmental organizations; and 15% in manufacturing, transport, distribution and energy.
Over the past three months, CGI has closed three transactions which were all accretive on a net and cash earnings basis and which will contribute to its consolidated revenue stream. These transactions include the acquisition of APG Technology and Solutions, C.U. Processing, as well as the taking of a 49% equity participation in AGTI. Two other transactions, namely an increase in CGI's equity participation in Quebec-based IT firm CIA to 49% from 35%, and the acquisition of RSI Realtime Consulting are expected to close over the next week. These transactions are part of the Company's two-pronged acquisition strategy, which is aimed at acquiring partial or complete ownership of high end and niche IT companies with a focus on particular vertical or geographic markets. CGI also continues to seek large acquisitions in the U.S.
With its three most recent transactions (APG, C.U. Processing and AGTI), CGI has added approximately $130 million to its revenue base on a run-rate basis. By May 1, 2001, the closing of a 10-year agreement with Mouvement Desjardins is expected to add another $100 million to its revenue stream, for incremental annual revenue of more than $230 million.
"We are pleased with these new developments," said Serge Godin, CGI's Chairman, President and CEO. "In regard to the acquisition of CDL, CGI today ranks among the few Canadian firms with the capability to serve its clients' end-to-end needs for ERP solutions, from implementation to outsourcing, including in an application service provider (ASP) mode."
About CGI
Founded in 1976, CGI is the largest independent Canadian information technology consulting firm and the fifth largest in North America, based on its headcount of close to 10,000 professionals. CGI's order backlog totals approximately CDN$7.0 billion and its revenue stands at CDN$1.4 billion. CGI provides end-to-end IT services and business solutions to 2,500 clients in Canada, the United States and more than 20 countries around the world. CGI's shares are listed on the New York Stock Exchange (GIB), as well as on the Toronto exchange (GIB.A). They are included in the Toronto Stock Exchange's TSE 100 index as well as the S&P/TSE Canadian Information Technology index. Web site: www.cgi.ca.
All statements in this press release that do not directly and exclusively relate to historical facts constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. 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, and other risks identified in Management's Discussion and Analysis (MD&A) in CGI Group Inc.'s annual report or Form 40F filed with the US Securities & Exchange Commission and the Company's Annual Information Form filed with Canadian securities commissions. All of the risk factors included in these filed documents are included here by reference. CGI disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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For more information:
CGI
Ronald White
Director, investor relations
(514) 841-3230
Eileen Murphy
Director, media relations
(514) 841-3430
