Canada CGI Acquires Logica for IT World Domination

CGI Group (News - Alert) Inc., Canada's best IT service provider, just made a deal to buy a larger British-Dutch company called Logica Plc, on Thursday. This will effectively make CGI Group more than twice as large as it was before, and it costed them $2.64 billion to do it. The company isn't just looking to raise its numbers. CGI Group also wants to make services more convenient for clients it has in Europe. This will also help it attract North American customers that also have services across the Atlantic, opening up new possibilities for its client base.

CGI has already received criticism of its expansion into a continent that currently experiences a series of troubles with its economy. As an example of how the Euro zone’s IT infrastructure looks, the continent is currently facing troubles adopting cloud technology because of the economical situation. Michael Roach, the CEO of CGI, commented on this, stating,  "The vast majority of Logica's (News - Alert) revenue is derived from Europe's largest economies - these include the UK, Germany, France, and the Nordics, which are attractive markets."

This isn't the first acquisition we've seen where a company in the UK fell into the hands of more influential North American firms. Misys, a company that deals with bank IT infrastructures, is currently in the process of being acquired by Vista, an equity group. Hewlett Packard Co. also made a purchase of a software developer, Autonomy (News - Alert).

Despite the criticism CGI has received, its shares rose approximately 12 percent on the Toronto Stock Exchange. The company apparently has delighted investors with this new purchase. Its shares in the United States also received a similar jump, just under 12 percent (11.7 percent) at the NYSE.

CGI's acquisition will make the company more competitive, raising its size and revenue by more than twice as much. Sales will figure at around $10.4 billion, and the company will have 72 thousand new employees spread across 43 countries, according to CGI. This puts CGI at eye level with IBM, Accenture, Cap Gemini, Tata Consultancy Services (News - Alert), and Infosys.