Market News

CGI to Snap Up Unico; Street Says Buy

Information technology consulting and systems integration company CGI Inc. (GIB) recently announced that its subsidiary, CGI Technology and Solutions Australia Pty Limited, has entered into an agreement to acquire a Melbourne-based technology consultancy and systems integrator, Unico.

The terms of the deal, which is likely to close in the next quarter, have not been disclosed so far.

Implications of the Deal

The buyout will allow CGI to gain a strong foothold in the Australian market. Further, with the opening of CGI’s Space, Defence and Intelligence Hub in Adelaide, the addition of Unico will allow CGI to expand its capabilities in the secure and flexible end-to-end services space.

Management Commentary

The UK & Australia President of CGI, Tara McGeehan, said, “We look forward to welcoming Unico into the CGI family. Right from our earliest discussions, it’s been clear that both organisations share similar values and capabilities, which we believe will result in a quick and successful integration. We are excited to bring together our expertise and innovation to build an even stronger presence in the Australian market.”

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Price Target

Recently, Scotiabank analyst Paul Steep reiterated a Buy rating on the stock with a price target of $102.10, which implies upside potential of 18.3% from current levels.

Consensus among analysts is a Strong Buy based on 9 Buys and 1 Sell. The average CGI price target of $100.31 implies upside potential of 16.3% from current levels. Shares of the company have gained 12.9% over the past year.

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