Luc, you should be happy with the latest announcement which sent the stock to a new high of $17.95. The stock is now up 240% in a year.
NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: THE CGI GROUP INC.
TSE;ME SYMBOL: GIB.A
APRIL 2, 1997
CGI Group Acquires CDSL Holdings Limited
MONTREAL, QUEBEC--
- Reinforces CGI's status as largest independent end-to-end IT
provider in Canada
- Increases annual revenue run rate to $260 million
The CGI Group Inc. today announced that it has entered into an agreement with The Co-operators Group Limited to acquire 100 percent of CDSL Holdings Limited ("CDSL") effective April 1, subject to usual regulatory approvals. The agreement additionally includes the renewal of an outsourcing contract to provide up to $100 million of information technology services to The Co-operators Group over the next five years, with an option to renew for an additional five years.
CDSL is owned approximately 80 percent by The Co-operators Group, which is exiting the IT business to focus on its core insurance operations, and approximately 20 percent by Credit Union Central of Saskatchawan, CUMIS Insurance and a number of Ontario-based credit unions.
"This acquisition reinforces CGI's status as the largest independent end-to-end information technology services provider in Canada with offices coast to coast," said Serge Godin, Chairman and CEO of CGI. "We are very pleased with this acquisition which significantly strengthens our position in information technology outsourcing, the fastest growing segment of the IT business in Canada.
"To meet the growing demand by the private and public sectors for outsourcing and for end-to-end IT services, CGI has undertaken an aggressive acquisition program in recent years. We have successfully integrated the acquired companies, applying our ISO
9001 certified business processes, and have steadily progressed to higher levels of performance. This is our largest acquisition to date, and an excellent fit, positioning us to continue our strong growth record," Mr. Godin said.
CGI is acquiring CDSL for $16 million cash, plus 200,000 Class A subordinate shares carrying one vote per share, and 745,000 first
preferred shares, Series 3 valued at $23.50 per share, carrying
one vote per share and convertible one-for-one into Class A
subordinate shares. Based on the market price of CGI Class A
shares at the time of the transaction, the total purchase price is
approximately $36.5 million.
CGI generated revenue of $122 million for the year ended September 30, 1996, while CDSL generated revenue of $79 million for the year ended December 31, 1996. CGI and CDSL together have an annual revenue run rate of $260 million, based on latest quarter results. The two companies combined will have an order book valued in excess of $400 million.
CDSL is Canada's largest independent provider of retail banking systems and electronic commerce/switching services. The company has a number of core strengths which complement CGI's operations. These include its national network of efficient data centres, unique networks for information processing and transaction
switching, and knowledge-based call centre services focused on
emerging platforms and technology. Today, CDSL processes approximately 75 percent of the electronic transactions on behalf
of the Canadian credit union community outside of Quebec.
CDSL delivers IT solutions and services to over 300 financial institutions with over two million customers and delivers switching services through more than 15,000 devices including more than 850 automated teller machines. CDSL also provides outsourcing services to high profile financial, government and private organizations. The company has 580 employees.
Following the acquisition of CDSL, CGI will have approximately 2,500 employees and offer complete business solutions to more than 1,800 organizations across Canada and in the United States and
internationally.
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