CGI to Acquire Logica for GBP322M
CGI Group Inc. (NYSE: GIB) has announced a recommended cash acquisition of Logica for 105 pence (C$1.68) per ordinary share equivalent to a total purchase price of GBP 1.7 billion (C$2.8 billion) plus the assumption of Logica's net debt of GBP 322 million (C$515 million) as of December 31, 2011.
Transaction represents a 59.8% premium to Logica's closing price on May 30, 2012 (the last business day before this announcement), a 49.6% premium to the average share price over the one month period to May, 30 2012 and a 32.8% premium to the average share price over the six month period to May 30, 2012.
Transaction implies an enterprise value multiple of approximately 6.6 times Logica's EBITDA for the 12 months ended 31 December 2011.
The transaction is expected to deliver substantial financial benefits through the realisation of annual integration benefits of GBP 125 million (C$200 million) by the end of the third financial year following completion. These benefits are expected to be realised at a one-off cost of GBP 165 million (C$265 million) over three years. In addition, it is anticipated that further revenue opportunities will be available to the combined business through the enhanced offering of both geographic and product services to clients of both CGI and Logica. -- The transaction is expected to be immediately accretive in the range of 25% to 30% to CGI's earnings per share excluding acquisition-related and integration costs. The accretion rate is expected to increase throughout the three year integration period.
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