Sunday, July 25, 2021

Merger Creates Consulting Monster

American Management Systems (AMS) announced it has entered into a definitive merger agreement with CGI Group, the largest Canadian independent IT services firm in an all cash transaction valued at $858 million.

AMS also announced it will sell off its defense and intelligence business to Arlington, Va.-based defense contractor CACI Corp. for $415 million with closing to occur once all tender offer conditions are satisfied.

The combination of CGI and AMS creates a multibillion dollar IT, business process and professional services company with approximately 25,000 employees and major locations in the U.S., Canada, and Europe. The combined entity will have approximately $3 billion in annual revenue and contract backlog of approximately $10 billion.

“This merger is a bold step in accelerating the execution of our strategic imperatives outlined two years ago, particularly in achieving scale and migrating to managed services,” said AMS Chairman and CEO Alfred Mockett. “The combination of these businesses provides an excellent strategic fit, business model and cultural fit. AMS and CGI are complementary businesses — both companies focus on customers in the public sector and in the financial services and communications industries.”

Under terms of the agreements:

  • CGI will acquire, through a tender offer, all of the outstanding shares of AMS at $19.40 per share in cash. This represents a 26% premium to the 30-day trailing average.
  • Serge Godin, chairman and CEO of CGI will be chairman and CEO of the combined entity, which will be known in the U.S. as CGI-AMS.
  • CACI will purchase the assets of AMS’s Defense & Intelligence business for $415 million in cash.
  • The CGI transaction is conditioned, among other things, upon customary approvals. The companies anticipate the transaction will be completed in the second quarter.

    Want to discuss this story? Take it over to our IT Management Forum.

    Similar articles

    Latest Articles

    Data Science Market Trends...

    When famed mathematician John W. Tukey postulated that advanced computing would have a profound effect on data analysis, he probably didn’t imagine the full...

    Data Recovery Market Trends...

    Data recovery is more important than ever in this era of constant cyber attacks and ransomware. The Verizon Data Breach Investigations Report (DBIR) looked...

    Trends in Data Visualization

    In a world of big data, visualization is becoming a key skill set that every business must master.  Digital technology has transformed the way businesses...

    Microsoft Data Portfolio Review

    With a host of analytics services for almost any situation, Microsoft Azure’s data services have got just about every base covered.   In the world...