20 September 2005 Computer services company LogicaCMG has confirmed that it will buy French rival Unilog in a deal worth €930.3 million, bolstering its core European presence.
European markets are key for the London-based Logica, but it has recently struggled in both French and German markets, where competition from rivals such as Atos Origin and Capgemini and IBM Global Services has been intense.
The acquisition of Unilog – France’s sixth largest IT services provider – will strengthen Logica’s position, said CEO Martin Read: “[We] will be well placed to seize opportunities in a fast moving and increasingly global IT services market.”
“Scales is all-important in today’s markets,” said Richard Holway, of market watchers Ovum Holway. “This is what their customers are looking for. The new entity will now be in the top ten of European IT services companies.”
The deal – worth €74 a share – represents a premium of 11.5% on the average price of Unilog shares in the month prior to the announcement. Unilog reported annual revenues of €657 million in 2004.
Logica expects to fund the transaction through a €600 million rights issue. It has so far reached agreement with various Unilog board members to acquire 32% of the shares, and expects to reach agreement with the remaining shareholders.
The deal, subject to the usual regulatory approval, is expected to close this autumn.