CGI makes acquisitions pay off

Article Excerpt

In 2012, CGI acquired U.K.-based outsourcing firm Logica.This was the biggest purchase in its 39-year history and is themain reason why the stock is up nearly 100% since then.The company plans to keep making acquisitions, which willhelp it reach its new goal of doubling its annual revenue in thenext five to seven years. Most of these will be smaller purchases,which cuts the risk of using acquisitions to expand. CGI has already identified 85 potential targets, mainly firmsthat would strengthen its position in its existing markets. It’s alsointerested in building on its expertise in fast-growing fields likecloud computing and computer security. CGI GROUP INC. $48 (Toronto symbol GIB.A; AggressiveGrowth Portfolio, Manufacturing & Industry sector; Sharesoutstanding: 313.4 million; Market cap: $15.0 billion; Priceto-sales ratio: 1.5; No dividends paid; TSINetwork Rating: ExtraRisk; www.cgi.com) is Canada’s largest computer-outsourcingprovider, helping its clients automate routine functions likeaccounting and buying supplies. That improves their efficiencyand lets them focus on their main businesses. Government agencies supply 33% of CGI’s revenue, followedby…