New MW Header

May 31, 2012
Transaction Analysis

CGI Group Inc. (NYSE:GIB) to acquire Logica PLC (LSE:LOG)


Financial Overview:

  • Equity Value: 1.7B ($2.6B)
  • Enterprise Value: 2.0B ($3.1B)
  • EV/Revenue: 0.5X
  • EV/EBITDA: 7.6X
  • Transaction Structure: Stock and Debt

 martinwolf Analysis:

  • CGI Group Inc. (NYSE: GIB), a leading global provider of IT and business process services, has made an offer to acquire Logica PLC, a business and technology services consulting and outsourcing company, for 1.7B ($2.6B USD).
  • CGI has major clientele in North America compared to Logica's European and Asian focus, providing a significant geographic expansion to CGI. Post-acquisition, CGI will have more than 70,000 employees and should be well positioned to play a dominant role in the IT services space.
  • The acquisition is expected to be immediately accretive in the range of 25-30% to CGI's EPS excluding acquisition-related and integration costs. In addition, recent trading shows that the market strongly supports the deal, with CGI Group, Inc. stock up over 10% in intraday trading.
  • The offer, at close to a 60% premium to Logica's closing price on 5/30/12, is significant because it shows Logica's value to CGI is much higher than it is to Logica itself. This concept was addressed by Marty Wolf in our latest Valuation & Deal Insights (VDI) newsletter where he discusses identifying the best owner of an asset in order to maximize value.
  • If completed, the Logica acquisition would be another bold move for CGI, following its August 2010 acquisition of Stanley, Inc, an IT services and solutions provider to the US Federal Government, for $1.1B.
  • Consolidation to increase scale continues in the IT services space. Recent examples include Tech Mahindra's agreement to acquire Satyam Computer Services and iGate Corporation's acquisition of Patni Computer Systems Limited. To compete against the larger firms in the space, companies either have to increase their scale or get acquired. Scale is paramount for all players in this space to help control profit margins as pricing compression continues.
  • martinwolf expects more consolidation to follow as first movers typically receive the highest price. Current market conditions currently present favorable buying opportunities for buyers with the means to consummate transactions.    

  Please go here to read the press release.


martinwolf was not the adviser in this transaction.  


To learn more about this transaction or our firm,  

contact Tim Mueller

About martinwolf    


Based in Silicon Valley, martinwolf is a leading middle market M&A Advisory focused on companies with services-based business models. Since 1997, our team has completed more than 115 transactions in six countries. We are a five-year member of the Merrill Lynch PS Referral Network, and were selected as ICICI Bank's (India's leading private bank) exclusive strategic partner for acquiring U.S. IT companies. martinwolf is a member of FINRA and SIPC. For more information, visit


December 1, 2011

Softchoice Corporation (TSX: SO) announced it has it has fulfilled its regulatory requirements under the Competition Act and has now completed the acquisition of substantially all of the assets of UNIS LUMIN, one of Canada's most highly regarded Cisco networking and managed services companies. Softchoice was represented by martinwolf | M&A Advisors. The acquisition strengthens Softchoice's professional services capabilities while providing the technology foundation to support the Company's future cloud offerings.

Please click here to view the announcement.   


September 30, 2011

SPS, a leading Unified Communications Provider, announced that Court Square Partners has made an investment in the company. martinwolf | M&A Advisors represented SPS in this transaction. SPS is a premier unified communication services integrator, ranked 131 on the 2011 VAR 500 list with 2010 sales of $143 million. Court Square is a $4B+ New York-based PE Group, with more than 150 lifetime investments.  

Please click here to view the announcement. 


September 20, 2011  

Accel-KKR, a technology-focused private equity investment firm, announced that it had taken a majority stake in Infinisource. Infinisource is a leading benefits administration technology and services company. martinwolf | M&A Advisors represented the seller in this transaction.  

Please click here to read more.    


martinwolf | M&A Advisors 2012    

   View our profile on LinkedIn    Follow us on Twitter 

15th Anniversary Logo
Founded 1997



Quick Links 















Quote of the Day


"Integrity is what happens when nobody is watching."