14 June 19. Recommended Cash Offer For Scisys Group Plc By CGI Group Holdings Europe Limited, a wholly-owned indirect subsidiary of CGI Inc. to be implemented by way of a scheme of arrangement under Chapter 1 of Part 9 of the Companies Act 2014.
- CGI Inc. (“CGI”) and SCISYS Group plc (“SCISYS”) have reached agreement on the terms of a cash offer, unanimously recommended by the SCISYS Board, pursuant to which CGI Group Holdings Europe Limited (“Bidco”), a wholly owned indirect subsidiary of CGI, will acquire the entire issued and to be issued ordinary share capital of SCISYS.
- Under the terms of the Acquisition, SCISYS Shareholders will be entitled to receive for each SCISYS Share 254.15 pence in cash (the “Consideration”)
- The Acquisition values the entire issued and to be issued ordinary share capital of SCISYS at approximately £78.9m.
- The Acquisition represents a premium of approximately:
- 24.6 per cent. to SCISYS’ Closing Price of 204.00 pence on 13 June 2019 (being the last practicable date prior to the publication of this Announcement);
- 43.7 per cent. to SCISYS’ volume weighted average Closing Price of approximately 176.89 pence over the six month period ended on 13 June 2019; and
- 47.0 per cent. to SCISYS’ volume weighted average Closing Price of approximately 172.91 pence over the twelve month period ended on 13 June 2019.
- The Consideration is in addition to the payment of the final dividend of 1.73 pence per SCISYS Share for the period to 31 December 2018 approved by SCISYS Shareholders at the annual general meeting on 6 June 2019 (the “Declared Dividend”), which will be paid on 26 July 2019 to holders of SCISYS Shares who are on the register of members at the close of business on 28 June 2019.
- If any dividend or other distribution (whether in cash, assets, shares or other securities of any member of the SCISYS Group) is authorised, declared, made or paid in respect of the SCISYS Shares on or after the date of this Announcement, other than the Declared Dividend, Bidco reserves the right to reduce the Consideration by the aggregate amount of such dividend or other distribution.
- Commenting on the Acquisition, Mike Love, Chairman of SCISYS, said: “The Board of SCISYS is unanimously recommending this deal to shareholders, viewing it as a wholesale endorsement of the success SCISYS has achieved to date. We believe SCISYS and CGI are highly complementary businesses sharing similar values and are confident that the combination will enable SCISYS to benefit from CGI’s size, strength and global reach.”
Commenting on the Acquisition, George Schindler, President and CEO of CGI said: “CGI’s offer to merge its operations with those of SCISYS is aligned to our Build and Buy strategy, providing opportunities to expand our industry depth in space, defense, government and media in the UK and Germany. SCISYS’ industry-leading expertise and IP-based services and solutions will provide an opportunity to globalise certain platforms utilizing the broader CGI geographic footprint and client relationships.”
BATTLESPACE Comment: Scisys caught the Editor’s eye earlier in the year as ‘one to watch,’ and as announced, the Editor bought some shares. (See: BATTLESPACE UPDATE Vol.21 ISSUE 05 04 February 2019 BUSINESS NEWS, Shares in Scisys marked up). At the Earnings brief last Friday June 7, CEO Klaus Martin Heidrich was tight lipped when the Editor suggested that the company could be a bid target rather than one on the acquisition trail. He said that given the mix of industries, space, defence and media, that they wouldn’t be a bid target! The Editor sent an email after the brief asking if he would be a candidate for BATTLESPACE Businessman of the Year 2020. When no reply came the Editor sent a reminder and Klaus replied saying. “Sorry for responding only now. I am extremely busy this week and will be back to you and to Ken next week.” Now we know why!