Shawshank, VA 5/31/12 (StreetBeat) -- Canada's CGI Group Inc. (NYSE: GIB) is acquiring the British-based information technology services firm Logica PLC (LSE:LOG) for 1.7 billion pounds, or about US$2.6 billion, the companies announced Thursday.
Montreal-based CGI said it would also assume Logica's net debt of about US$500 million.
CGI CEO Michael Roach said the acquisition was consistent with the company's growth strategy and its belief that global consolidation of the industry is both necessary and inevitable.
"We believe Logica is the right acquisition, at the right price and at the right time to create one of the very few independent global end-to-end technology services providers," he said.
Logica chairman David Tyler said combining the two businesses will help meet clients' requirements for a more comprehensive international presence.
Under the deal, Logica shareholders would get 105 pence in cash for each share, a premium of almost 60 percent on Wednesday's closing share price of 65.70 pence.
Logica stock has traded at an average of 70.2 pence for the month ending May 30, CGI said.
Logica's board has unanimously agreed to recommend the deal to its shareholders.
The companies expect the purchase will be effective by the end of September.
Meanwhile, the pension fund manager Caisse de depot et placement du Quebec announced an investment of about US$1.03 billion in CGI Thursday, which will help the company finance its planned acquisition of Logica.
CGI said the combined company that will result from its acquisition will have approximately 72,000 professionals in 43 countries and revenue of about US$10.7 billion.
Founded in 1976, CGI is one of the largest independent IT and business process services firms in the world with about 31,000 employees and US$4.4 billion Canadian in annual revenue.
CGI shares closed up 5 Canadian cents at 21.01 Canadian dollars on Wednesday on the Toronto Stock Exchange.
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