RSS feedsIT services consulting group LogicaCMG has acquired France's sixth largest management consulting firm Unilog for just under €1bn, in a move that will transform it into a Top 10 European player with combined revenues of more than £2bn.
LogicaCMG acquired the French business for €930m (£630m) with the deal part-funded by a discounted 1-for-2 shareholder rights issue to raise £389m.
The rights issue enables the firms' shareholders to buy new shares in the company at a discount to the market price and is being offered at 107p a share, a 36% discount to Friday's closing price of 168p. On a share per share basis, LogicaCMG said it would pay €73 in cash for Unilog.
The group said the acquisition would boost earnings per share in the first full year after completion and that it expected an additional £19m by 2007, with half of that coming through next year.
In the same announcement, LogicaCMG said trading since its interim results in August had been 'in line with expectations'.
Martin Read, LogicaCMG chief executive, said that Unilog was an 'excellent business' with a track record of delivering a 'first class performance'.
'The two businesses have complementary client bases, geographical strengths and service offerings. There are exciting opportunities to cross-sell capabilities across the two businesses, particularly LogicaCMG's expertise in outsourcing and global delivery as demand for these services increases', he added.
In a call with reporters, Read said he is confident the acquisition will help LogicaCMG bring its loss-making French operations to a similar level of profitability at Unilog.
