Topic: How To Invest

The Successful Investor Hotline – Friday, June 21, 2019

Article Excerpt

CGI INC., $101.07, Toronto symbol GIB.A, is Canada’s largest provider of computer outsourcing services. It helps its clients automate certain routine functions like accounting and buying supplies. That makes companies more efficient and lets them focus on their main businesses. The company has agreed to acquire SCISYS. Based in Ireland, that firm provides computer outsourcing and advisory services to government and business clients in the media, space and defense, and environmental industries. It operates mainly in Ireland, the U.K. and Germany. CGI will pay 78.9 million British pounds (about $133 million Canadian) for SCISYS. The new operations will add $100 million to CGI’s annual revenue of roughly $11.5 billion. Investors controlling 25.0% of SCISYS’s shares have agreed to support CGI’s offer. Assuming the remaining shareholders approve, the company expects to complete the purchase in the second half of 2019. Using acquisitions to expand adds risk. However, CGI tempers that risk by targeting firms that complement its expertise or help it expand geographically. OUR RECOMMEDATION: CGI…