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MONTRÉAL, Canada - CGI (TSX: GIB.A) (NYSE: GIB), a global leader in IT and business consulting services, has finalized its acquisition of Novatec, a prominent digital services firm based in Germany and Spain. This move, completed by CGI Deutschland B.V. & Co. KG, aims to enhance CGI’s service offerings, particularly in the automotive, manufacturing, and financial services industries.
Novatec, established in 1996, is recognized for its comprehensive portfolio of business and IT consulting services, including cloud solutions, agile products, software development, and digital strategies. The integration of Novatec’s application performance management solutions is expected to bolster CGI’s intellectual property portfolio, facilitating client access to advanced technologies such as artificial intelligence (AI).
Ralf Bauer, CGI President of Germany operations, emphasized the cultural alignment between CGI and Novatec, highlighting their shared commitment to delivering tangible client results through innovation and a strong sense of accountability. Alberto Anaya, Senior Vice-President and Business Unit Leader for CGI Spain, also noted that Novatec’s expertise will reinforce CGI’s technological capabilities and industry knowledge.
With the completion of this acquisition, more than 300 IT and consulting experts from Novatec have joined CGI, expanding the company’s presence in Germany, particularly in the Stuttgart metro area and the South-West region, and in Granada, Spain.
CGI, founded in 1976, is one of the largest independent IT and business consulting services firms worldwide. The company boasts 91,000 consultants and professionals globally, offering a broad range of services from strategic consulting to managed IT and business process services. With a P/E ratio of 18.37 and current revenue of $10.3 billion, CGI has demonstrated consistent performance. InvestingPro analysis shows the company is currently trading below its Fair Value, with 8 analysts recently revising their earnings expectations upward. For deeper insights into CGI’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
The acquisition is part of CGI’s ongoing efforts to enhance its global delivery network and help clients accelerate their digital transformation. This strategic expansion into key European markets underscores CGI’s commitment to providing end-to-end solutions that drive client success. With an Altman Z-Score of 11.29 indicating strong financial stability and a track record of maintaining low price volatility, CGI continues to demonstrate resilient market performance. Discover more detailed financial metrics and analysis through InvestingPro, where subscribers can access exclusive insights and comprehensive company research. This article is based on a press release statement.
In other recent news, CGI Group reported first-quarter results that exceeded expectations, with adjusted earnings per share reaching C$1.97, surpassing analyst projections of C$1.40. The company also reported revenue of C$3.79 billion, outpacing forecasts of C$2.68 billion, marking a year-over-year revenue growth of 5.1%. Earnings before income taxes rose by 12.3% to C$591.7 million, with a margin expansion to 15.6%. Despite these positive results, CGI Group announced a restructuring plan in Europe, which is expected to incur costs of approximately C$42 million by the third quarter of fiscal 2025.
RBC Capital Markets recently adjusted their financial outlook on CGI Group, raising the stock price target to $192 from $178, while maintaining an Outperform rating. This adjustment followed CGI’s earnings announcement and highlighted the company’s strategic mergers and acquisitions as a key driver for future growth. On the other hand, Bernstein analysts increased their price target slightly to C$144 from C$143, maintaining an Underperform rating due to higher-than-expected restructuring costs and limited traction in Europe. The firm’s cautious outlook remains unchanged, despite the inclusion of recent acquisitions in their financial models.
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