The Yahoo newswire says that Canadian IT consulting firm CGI is buying American Management Systems (AMS), the consulting firm at which I was a principal before I left for business school. The interesting parts?
- CGI is paying a 25% premium ($858 million) over the market cap ($657 million) of the stock (consistent with the feelings of many former and present AMSers that the stock was undervalued).
- As part of the deal, the defense and intelligence assets of AMS are being sold, for $415 million… to AMS rival CACI.
I wonder how my old teammates are being affected by this. We beat CACI to win the Standard Procurement System award, but a lot has changed since 1997 and I’m sure there’s a lot of value in combining the joint resources of the two businesses.
Also, what a difference a few years (and the war on terror) make. Four years ago, I don’t think I would have predicted that the defense and intelligence businesses would have a market cap of almost half the total value of AMS.