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GIB (NYSE) GIB.A (TSX) SXE (NYSE)
www.cgi.com/newsroom www.stanleyassociates.com
Note: Dollar amounts are in USD, translated from CAD at par
FAIRFAX and ARLINGTON, VA, May
7 /PRNewswire-FirstCall/ - CGI Group Inc. (NYSE: GIB; TSX:
GIB.A), a leading provider of information technology and business
processing services, and Stanley Inc. (NYSE: SXE), a premier
provider of information technology services and solutions to U.S.
defense, intelligence and federal civilian government agencies,
today announced that they have entered into a definitive merger
agreement for CGI to acquire Stanley through a cash tender offer at
$37.50 per share, representing an
enterprise value of approximately $1.07
billion.
The per share purchase price represents a premium of 23.3% over
Stanley's 30-day volume weighted
average stock price and 38.3% over its 60-day average.
The transaction will be funded from CGI's cash on hand and
existing credit facilities. The proposed transaction has been
unanimously approved by the board of directors of both companies.
In addition, certain Stanley board
members and executive officers have signed a voting agreement in
support of the offer.
This strategic acquisition brings additional scale to CGI's U.S.
operations, which will account for nearly half of CGI's global
revenue. The powerful combination of CGI's U.S. federal business
unit and Stanley brings additional
resources and capabilities to the U.S. Government market and marks
CGI Federal's expansion into the U.S. defense and intelligence
markets. With this acquisition, CGI Federal joins a select list of
Federal IT contractors with more than $1
billion in revenue.
"The acquisition of Stanley is
in line with our Build and Buy profitable growth strategy, and is
consistent with our commitment to continue expanding our footprint
in the strategic U.S. market and specifically in the U.S. federal
market. It is also consistent with our commitment to bring
increased value to our clients and employees. From an investor
perspective, this transaction will be accretive to GAAP earnings
per share within the first 12 months," said Michael E. Roach, President and CEO, CGI. "CGI
has a strong culture and market momentum that will provide
additional professional opportunities and growth for all our
employees, including the Stanley
professionals, whom we warmly welcome to CGI," added Roach.
Philip O. Nolan, Chairman,
President and CEO of Stanley
commented: "This is a great transaction for all stakeholders, as it
provides Stanley employees with
additional growth opportunities as part of a global IT services
player and our clients with a powerful combination of
highly-skilled employees and additional scale to enhance value. For
our shareholders, this transaction provides attractive returns and,
accordingly, our Board intends to recommend that Stanley shareholders accept this offer."
"Joining forces with Stanley is
a critical element of our U.S. growth strategy. The combination of
Stanley's defense and civilian IT
and BPO services with CGI's end-to-end capabilities,
mission-critical solutions, and strong client relationships cements
our position as a player of scale across the entire U.S. Federal
Government," commented Donna Morea,
President U.S., Europe and
Asia, CGI. "Together, CGI and
Stanley are a great cultural fit,
sharing deep industry knowledge, a strong commitment to employees,
and a reputation for operational excellence."
Transaction Highlights:
- Based on calendar 2009 results, the combined companies would have total
revenues of approximately $4.5 billion, 31,000 employees and a booked
backlog of more than $13.5 billion, representing approximately 3 times
annual revenue.
- Stanley will become part of CGI Federal Inc., a wholly-owned
subsidiary, which currently provides services to the U.S. Federal,
defense, intelligence and civilian agencies.
- Post-transaction, CGI Federal will have approximately 7,000
professionals and $1.2 billion in annual revenue. Its client base will
be a diversified and balanced blend of 55% defense and intelligence and
45% U.S. Federal civilian agencies. CGI Federal will continue to be led
by its current President, George Schindler.
- The consolidated company will continue serving all three branches of
government, 12 Cabinet-level agencies, the four military services, and
a broad range of intelligence and national security agencies.
Tender Offer and Closing
Under the terms of the definitive merger agreement, CGI will
commence a cash tender offer to acquire Stanley's outstanding shares of common stock
at $37.50 per share. The closing of
the tender offer, which is expected to occur during the fall of
2010, is subject to customary terms and conditions, including the
tender of at least a majority of Stanley's shares (on a fully diluted basis)
and regulatory approvals including Hart-Scott-Rodino and
Exon-Florio. The definitive merger agreement provides for the
parties to effect, subject to customary conditions, a merger
following the completion of the tender offer, which will result in
all shares not tendered in the tender offer being converted into
the right to receive $37.50 per share
in cash. The definitive merger agreement also contains a break-up
fee payable to CGI under certain circumstances and a provision
under which Stanley has agreed not
to solicit any competing offers.
Advisors
Deutsche Bank and TD Securities acted as financial advisors to
CGI. Holland & Knight LLP,
Kaye Scholer LLP and Fasken Martineau DuMoulin LLP, served as legal
advisors to CGI. Sagent Advisors Inc. served as financial advisor
to Stanley in connection with the
transaction. Stanley has been
represented by Cravath, Swaine & Moore LLP and Covington &
Burling LLP.
Conference Call & Webcast
A conference call to discuss the proposed transaction will be
held today, May 7, 2010 at
8:30 am EDT. Participants will
include: Michael E. Roach, President
and CEO, CGI; Donna Morea,
President, U.S., Europe and
Asia, CGI; and George Schindler, President, CGI Federal. To
participate on the call, please dial 1-888-789-9572 using passcode
7560086#. The conference call and supporting slides will both be
available live and for replay at cgi.com/investors.
About CGI
Founded in 1976, CGI Group Inc. is one of the largest
independent information technology and business process services
firms in the world. CGI and its affiliated companies employ
approximately 26,000 professionals. CGI provides end-to-end IT and
business process services to clients worldwide from offices in
the United States, Canada, Europe and Asia
Pacific as well as from centers of excellence in
North America, Europe and India. As of March 31,
2010, CGI's order backlog was $11.4
billion. CGI shares are listed on the NYSE (GIB) and the TSX
(GIB.A) and are included in both, the Dow Jones Sustainability
World Index and the FTSE4Good Index. Website: www.cgi.com.
About Stanley
Stanley is a provider of
information technology services and solutions to U.S. defense,
intelligence and federal civilian government agencies. Stanley offers its customers systems
integration solutions and expertise to support their
mission-essential needs at any stage of program, product
development or business lifecycle through five service areas:
systems engineering, enterprise integration, operational support,
business process management, and advanced engineering and
technology. Headquartered in Arlington,
Va., the company has approximately 5,000 employees at over
100 locations in the U.S. and worldwide. Stanley has been recognized by FORTUNE
magazine as one of the "100 Best Companies to Work For" from 2007
through 2009. Please visit www.stanleyassociates.com for more
information.
Additional Information
The tender offer for the outstanding shares of Stanley has not yet commenced. This
announcement is not a recommendation, an offer to purchase or a
solicitation of an offer to sell shares of Stanley. At the time the tender offer is
commenced, CGI, CGI Federal and an indirect wholly-owned subsidiary
of CGI will file a tender offer statement on Schedule TO with the
U.S. Securities and Exchange Commission, and Stanley will file a
solicitation/recommendation statement on Schedule 14D-9 with
respect to the tender offer. Investors and Stanley stockholders are strongly advised to
carefully read the tender offer statement (including the offer to
purchase, the letter of transmittal and the related tender offer
documents) and the related solicitation/recommendation statement
when they become available, as they will contain important
information, including the various terms of, and conditions to, the
tender offer. Such materials, when prepared and ready for release,
will be made available to Stanley's stockholders at no expense to them.
In addition, at such time Stanley
stockholders will be able to obtain these documents for free from
the U.S. Securities and Exchange Commission's website at
www.sec.gov.
Forward-looking Statements
All statements in this press release that do not directly and
exclusively relate to historical facts constitute "forward-looking
statements" within the meaning of that term in Section 27A of the
United States Securities Act of 1933, as amended, and Section 21E
of the United States Securities Exchange Act of 1934, as amended,
and are "forward-looking information" within the meaning of
Canadian securities laws. These statements and this information
represent CGI's intentions, plans, expectations and beliefs, and
are subject to risks, uncertainties and other factors, of which
many are beyond the control of the Company. These factors could
cause actual results to differ materially from such forward-looking
statements or forward-looking information. These factors include
but are not restricted to: uncertainties as to the timing of the
tender offer and the merger; uncertainties as to how many of the
Stanley stockholders will tender
their shares in the offer; the risk that competing offers will be
made; the possibility that various closing conditions for the
transaction may not be satisfied or waived, including regulatory
approvals; the timing and size of new contracts; acquisitions and
other corporate developments; the ability to attract and retain
qualified members; market competition in the rapidly evolving IT
industry; general economic and business conditions; foreign
exchange and other risks identified in the press release, in CGI's
Annual Report on Form 40-F filed with the U.S. Securities and
Exchange Commission (filed on EDGAR at www.sec.gov), the Company's
Annual Information Form filed with the Canadian securities
authorities (filed on SEDAR at www.sedar.com), as well as
assumptions regarding the foregoing. The words "believe,"
"estimate," "expect," "intend," "anticipate," "foresee," "plan,"
and similar expressions and variations thereof, identify certain of
such forward-looking statements or forward-looking information,
which speak only as of the date on which they are made. In
particular, statements relating to future performance are
forward-looking statements and forward-looking information,
including, without limitation, any statements related to the
acquisition of Stanley being
accretive to CGI's GAAP earnings within the first twelve months.
CGI disclaims any intention or obligation to publicly update or
revise any forward-looking statements or forward-looking
information, whether as a result of new information, future events
or otherwise, except as required by applicable law. Readers are
cautioned not to place undue reliance on these forward-looking
statements or on this forward-looking information. You will find
more information about the risks that could cause our actual
results to differ significantly from our current expectations in
the Risks and Uncertainties section.
SOURCE CGI GROUP INC.