Defense IT Firms Consolidating

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Stanley, which not long ago swallowed up Oberon Associates, is now being scarfed up by Canadian company CGI.

Montreal-based CGI Group has agreed to purchase Stanley, an information technology business headquartered in Arlington, in an effort to expand CGI's reach into the U.S. defense and intelligence contracting market.

The acquisition would make CGI's federal arm -- headquartered in Fairfax -- a government IT provider with more than $1 billion in annual revenue.


CGI said it will use cash on hand and existing credit facilities to acquire Stanley for $1.07 billion, or $37.50 per share. The sales price represented a premium of 23.3 percent over Stanley's 30-day volume weighted average stock price and 38.3 percent over its 60-day average. The deal is subject to federal antitrust and foreign ownership review.

CGI created its federal arm from its purchase of American Management Systems in 2004. At the time, however, the company opted not to buy AMS's defense and intelligence business.

"It was a matter of making sure we could swallow AMS," said Donna Morea, president of CGI's operations in the United States, Europe and Asia. Additionally CGI, as a Canadian company, did not have the infrastructure to do classified work for the Defense Department, she said.

By: Brant