CGI, the Canadian IT firm that is acquiring UK outsourcer Logica, has announced a fall in net income of 30% following the takeover announcement.
For its third-quarter results for the three months to June, the company saw sales increase by 5.1% to C$1.06bn (£672m), while profits fell by 30% C$87.2m.
CGI announced it would acquire Logica for £1.7bn in May, with the deal expected to go through on 20 August. In its results CGI said it will also assume Logica’s net debt of £322m.
The company spent C$6.7m in acquisition-related costs for the three-month period, which it said consisted of professional fees.
Michael Roach, CEO of CGI, said: “Our continuing ability to generate significant cash from operations positions us to fully meet our strategic and financial commitments, including the transformational business combination with Logica which we expect to close in the current quarter.”
Anthony Miller, co-founder of analyst firm TechMarketView, said he was sceptical about the deal: “There is still nothing that changes my view that CGI simply does not have any idea what it’s getting itself into.
“Rumours are flourishing as to whom will succeed Andy Green as CEO of Logica (or as it will doubtless soon be known, CGI Europe) though in a sense it probably doesn’t matter, unless he/she comes with miracle worker credentials.”
30 Jul 2012