CGI Group Inc. (GIB/A) agreed to buy Logica Plc (LOG) for 1.7 billion pounds ($2.6 billion) in cash to more than double sales and add European clients for services such as payroll management and the control of orbiting satellites.
Logica investors will get 105 pence per share, almost 60 percent more than yesterday’s closing price, Montreal-based CGI said today in a statement. Logica shares rose as much as 67 percent to 109.40 pence and traded up 64 percent as of 9:33 a.m. in London trading.
It’s a timely transaction as Logica’s management was facing structural issues at the business combined with a substantial pressure on margin,” said Milan Radia, an analyst at Jefferies Group Inc. “It’s a good deal for Logica shareholders at this price.”
Logica cut its revenue forecast in December and sought to speed up restructuring efforts in its Dutch and Belgian businesses as clients deferred spending. The acquisition is the third major purchase of a British IT services and software company within a year following the sales of Autonomy Corp. to Hewlett-Packard Co. (HPQ) and Misys Plc (MSY) to Vista Equity Partners LLC.
CGI, which provides information technology and business- process services to about 31,000 professionals, said it expects the purchase to be completed by the end of September.
