RE: Update on T-Systems: Go Ahead for CGI
TV Mike,
Thanks for the update. The press release talks about transferring T-System's Indian operations to Cognizant. Not sure if that closes the door for CGI to take any part of the remainder of T-System's business and resources. Probably not, but I wouldn't slam the door shut on this one yet.
Remember the AMS deal, where CACI took the defence contract work and CGI took the remainder? Maybe it could be another break-up situation like this? It doesn't sound likely.
Maybe it's all for the better. As Shinny pointed out, this could have been a risky deal for CGI.
CGI has a pretty good track record of not chasing foolish acquisitions. I'm sure there have been many opportunities in the past to do bad deals and non-accretiative earnings acquisitions, which is precisely why we haven't seen any deals done. I think Mike & Co. are waiting for a good deal to come along, not just the first opportunity to buy a bigger top line.
As much as I'd like to see a big deal go down and a significant acquisition, it has to make sense at the bottom line, not just the top line revenue.
I'm all for waiting if it means better value on my investment in the long time.
Take your time Mike and do the right thing.
- Serge.