Bell Canada Purchases another $43.7 Million of CGI Shares
Very strong vote of confidence in CGI by Bell Canada. Note, order backlog is now up to $1.35 billion.
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FOR: THE CGI GROUP INC. TSE, ME SYMBOL: GIB.A
OCTOBER 23, 1997
CGI and Teleglobe Complete Insurance Systems Group
Transaction and Bell Canada Purchases $43.7 Million of
First Preferred Shares, Series 1 of CGI to Maintain its
Level of Equity Interest
MONTREAL, QUEBEC--The CGI Group Inc. and Teleglobe Inc. announced
today that they have completed the transaction through which CGI
has acquired Teleglobe's Insurance Systems group, effective
October 22, 1997.
CGI acquired Teleglobe's Insurance Systems group for $20 million
cash plus $120 million in shares, consisting of 5,265,200 first
preferred shares, for an aggregate consideration of $140 million.
These shares carry one vote per share and are convertible one for
one into Class A subordinate shares at any time at the option of
the holder. Such conversion right has been exercised upon
completion of the transaction, on October 22, 1997.
Related to the transaction, Bell Canada, which acquired an equity
interest in CGI in November 1995, elected to exercise the
anti-dilution rights which were negotiated as part of its business
partnership with CGI, in order to maintain its equity interest at
23.81 percent. Accordingly, Bell Canada has purchased 2,189,108
first preferred shares, series 1 of CGI for an aggregate price of
$43.7 million.
As a result of these transactions, CGI's shareholders' equity grew
by $163.7 million and the company has a cash position of $10
million with no debt. Following Bell Canada's share purchase,
Teleglobe will have an 18.47 percent equity interest in CGI.
"This acquisition is very strategic for us," said Serge Godin,
CGI's Chairman and CEO. "It broadens and strengthens our position
in the fast growing financial services industry and provides a
solid foundation for CGI to grow in the important U.S. market,
with emphasis on the outsourcing industry.
"We view Bell Canada's decision to maintain its level of equity
interest as a strong vote of confidence in a business partnership
which is providing significant benefits to all parties - Bell, CGI
and our clients," Mr. Godin added.
Teleglobe's Insurance Systems group is the third largest IT
outsourcer and business solutions provider to the property and
casualty insurance industry in North America and the largest in
Canada. With headquarters in Andover, Massachusetts, it generates
about 56 percent of its revenues in the U.S., 38 percent in Canada
and 6 percent overseas. It has offices in the U.S., Canada and the
UK and employs approximately 900 people, of which 300 are in
Canada.
CGI is the largest Canadian-owned independent information
technology consulting firm. As a result of this latest
transaction, CGI employs 3,600 professionals and has a revenue-run
rate of $525 million and an order backlog valued at over $1.35
billion. It provides end-to-end IT services and business solutions
to more than 2,000 clients throughout Canada, the U.S. and
elsewhere in the world. |
