French acquisition strengthens LogicaCMG
Anglo-Dutch IT services group heads for European Top 10 position with acquisition of French management consulting group
IT services consulting group LogicaCMG has acquired France’s sixth largest
management consulting firm Unilog for just under €1bn, in a move that
will transform it into a Top 10 European player with combined revenues of more
than £2bn.
LogicaCMG acquired the French business for €930m (£630m) with the deal
part-funded by a discounted 1-for-2 shareholder rights issue to raise £389m.
The rights issue enables the firms’ shareholders to buy new shares in the
company at a discount to the market price and is being offered at 107p a share,
a 36% discount to Friday’s closing price of 168p. On a share per share basis,
LogicaCMG said it would pay €73 in cash for Unilog.
The group said the acquisition would boost earnings per share in the first
full year after completion and that it expected an additional £19m by 2007, with
half of that coming through next year.
In the same announcement, LogicaCMG said trading since its interim results in
August had been ‘in line with expectations’.
Martin Read, LogicaCMG chief executive, said that Unilog was an ‘excellent
business’ with a track record of delivering a ‘first class performance’.
‘The two businesses have complementary client bases, geographical strengths
and service offerings. There are exciting opportunities to cross-sell
capabilities across the two businesses, particularly LogicaCMG’s expertise in
outsourcing and global delivery as demand for these services increases’, he
added.
In a call with reporters, Read said he is confident the acquisition will help
LogicaCMG bring its loss-making French operations to a similar level of
profitability at Unilog.