CGI reaches goal line of $1B Stanley purchase

CGI Group has effectively acquired Stanley Inc., having completed its cash tender offer for all outstanding shares of the government contractor based in Arlington, Va. Stanley will become a wholly owned subsidiary of CGI Federal.

CGI Group, of Montreal, ranks on Washington Technology’s of the largest federal contractors. Stanley ranks on the list.

CGI Group Inc. has effectively acquired Stanley Inc., having completed its cash tender offer for all outstanding shares of the systems integrator based in Arlington, Va.

All shares that were tendered and not validly withdrawn have been accepted for purchase, according to an announcement from CGI. The company will pay $37.50 per share without interest and less any required withholding taxes, according to the statement.

CGI is now in the process of effecting a “short-form” merger under Delaware law to make Stanley a wholly owned subsidiary of CGI Federal Inc., the company's U.S. government business.

After expiration of the tender offer at midnight Monday, CGI was advised by Computershare Investor Services Inc., the depositary for the offer, that Stanley stockholders had tendered 22.55 million shares, representing 95.2 percent of Stanley common stock.

The $1.07 billion cash deal, which was first announced in May, more than doubles the size of CGI’s U.S. government business. The deal also gets CGI into the U.S. defense market on a large scale for the first time.

“Consistent with our strategic plan, this combination will increase our U.S. revenue to more than 45 percent of our global total,” Michael Roach, CGI president and CEO, said in the announcement.

“Completing the strategic merger with Stanley will solidify our position in the U.S. market, specifically in the massive $80 billion federal government market, opening up the defense and intelligence space and providing a window on the full spectrum of opportunities across the U.S. government,” Roach said.

CGI will account for 6.5 weeks of Stanley’s operations in its fourth-quarter results, including revenue, and will reflect the impact of some one-time costs related to this transaction on its earnings per share and cash from continuing operations.

No. 822010 Top 100 listNo. 44
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