The closure of the deal follows Cognicase’s decision last week to accept an increased offer from CGI of CAD4.50 cash and 0.6311 CGI shares per Cognicase share, up from CAD4.25 and 0.5484 shares per share, based on CGI’s share price of CAD7.10. The offer also included maximum cash and shares payouts totaling 56% and 44% of the revised offer.
The new deal was structured in such a way that the cash and shares component was effectively split half and half enabling Cognicase to get a larger percentage of CGI shares proportionately to the cash component. As a result, the value of the deal increased from the CAD292.6m ($185.2m) initial bid in December to a total consideration of CAD320.6m ($202.9m) in cash and shares in the accepted offer.
The Cognicase acquisition will give CGI a further CAD513.2m ($323.3m) in revenue based on full-year results to September 30, 2002, and will create a combined business with revenue of CAD2.72bn ($1.73bn). Despite this CGI will be taking on heavy losses from Cognicase that amounted to CAD471.3m ($296.9m) at the end of the year. Through the deal, CGI will also take on a major 10-year CAD1.2bn ($759m) outsourcing engagement with the National Bank of Canada, which Cognicase signed in June 2000.
Source: Computerwire
