CGI looking to double in size in next five to seven years
CGI, a Montreal-headquartered global IT consulting firm, is planning to double in size over the next five to seven years via acquisitions and organic growth, according to a Bloomberg report.
The firm’s CFO, Francois Boulanger, told the news outlet that CGI would consider deals in countries including the US, Germany, and the UK.
CGI sold its first public bonds this month in a bid to help fund future deals. The consultancy sold US$1 billion of five- and 10-year US dollar denominated bonds and $600 million of seven-year Canadian dollar bonds. The bond proceeds were used to repay a bank loan taken at the start of the pandemic and to refinance privately placed US dollar securities.
CGI is also considering borrowing in euros and selling sustainable bonds to fund acquisitions. The firm has extensive operations across North America and Europe, as well as further locations in Asia-Pacific and Africa.
“We wanted to have another tool in our tool set,” Boulanger told Bloomberg in a video interview. “We have pretty large acquisitions that we are targeting in the future.”
The firm hasn’t borrowed on public markets before because it generates approximately $2 billion in cash per year, with about $400 million reinvested. The more aggressive growth strategy has pushed the company’s hand, however.
CGI has made nearly 90 acquisitions since going public in 1986, with its last major purchase being the 2012 acquisition of UK-based Logica for $2.8 billion.
The firm has more than 77,000 employees and works with major private and public sector clients worldwide. CGI reported revenues of $12.16 billion in 2020.
The company reported a revenue drop of one percent in the third quarter of 2021, falling slightly from $3.02 billion from $3.05 billion. However, CGI reported a nearly 30% increase in net income for the quarter, rising to $338.5 million or $1.36 per diluted share, up from $260.9 million or $1 per share in Q3 2020.
