CGI expands operations in multiple U.S. metro markets with Daugherty

Rhea-AI Summary

CGI (NYSE: GIB) has signed an equity purchase agreement to merge with Daugherty, a St. Louis-based professional services firm. The merger will add over 1,100 consultants to CGI's workforce and strengthen its presence in key U.S. markets including St. Louis, Atlanta, Minneapolis, Chicago, Columbus, Dallas, and New York. The transaction, agreed upon on November 29, 2024, is expected to close in December 2024.

The merger enhances CGI's capabilities in artificial intelligence, data analytics, strategic IT consulting, and business advisory services for Fortune 500 clients across various sectors. Daugherty clients will maintain local relationships while gaining access to CGI's global capabilities and delivery centers. The deal also includes CGI's support of The Daugherty Foundation, promoting education and career opportunities in technology.

Positive

• Addition of 1,100+ skilled consultants strengthening workforce
• Expansion into 7 key U.S. growth markets
• Enhanced capabilities in AI, data analytics, and strategic IT consulting
• Access to Fortune 500 client base in multiple sectors
• Geographic expansion of delivery centers and service capabilities

Negative

• None.

Insights

Financial Analyst

This strategic acquisition significantly expands CGI's footprint in key U.S. markets and strengthens its position in high-growth sectors. The addition of 1,100 consultants will boost CGI's service delivery capabilities and revenue potential in major metropolitan areas. Daugherty's expertise in AI, data analytics and strategic IT consulting aligns perfectly with current market demands and enhances CGI's competitive position in the digital transformation space. The merger particularly strengthens CGI's presence in financial services and healthcare sectors, which are experiencing rapid digital adoption. While the financial terms weren't disclosed, Daugherty's strong market position and Fortune 500 client base suggest this is a valuable addition to CGI's portfolio that should drive growth and margin expansion in the U.S. market.

Tech Industry Analyst

The merger strategically positions CGI to capitalize on the growing demand for AI and cloud transformation services. Daugherty's expertise in FinOps and sustainability solutions adds valuable capabilities to CGI's portfolio at a time when enterprises are increasingly focusing on these areas. The geographic expansion into major tech hubs like Atlanta, Minneapolis and Dallas is particularly significant as these markets are experiencing substantial growth in digital transformation initiatives. The cultural alignment and shared focus on innovation between the two companies should facilitate smooth integration and knowledge transfer. This acquisition strengthens CGI's competitive position against other major IT consulting firms in the U.S. market.

Market Research Analyst

This acquisition reflects the broader consolidation trend in the IT consulting sector as firms seek to expand their service offerings and geographic reach. Daugherty's recognition as a top workplace and strong local market presence in multiple U.S. metros adds significant value to CGI's talent acquisition strategy, particularly important in the current competitive tech labor market. The focus on Fortune 500 clients in key sectors like financial services, healthcare and retail provides CGI with enhanced cross-selling opportunities and deeper market penetration. The merger also strengthens CGI's metro market proximity model, which is increasingly important as clients seek local expertise combined with global delivery capabilities.

Stock Market Symbols
GIB (NYSE)
GIB.A (TSX)
cgi.com/newsroom

Merger strengthens CGI's position with Fortune 500 clients in St. Louis, Atlanta, Minneapolis, Chicago, Columbus, Dallas and New York

ST. LOUIS, Mo., Dec. 11, 2024 /PRNewswire/ - CGI (NYSE: GIB) (TSX: GIB.A) today announced the signature of an equity purchase agreement to merge operations with Daugherty, a St. Louis-based professional services firm specializing in artificial intelligence, data analytics, strategic IT consulting, and business advisory services for Fortune 500 clients in the financial services, healthcare, communications, retail and manufacturing sectors. The merger of operations brings more than 1,100 talented consultants to CGI, further strengthening the company's presence in multiple key U.S. growth markets, including St. Louis, Atlanta, Minneapolis, Chicago, Columbus, Dallas and New York. The parties entered into a purchase agreement on November 29, 2024, and the transaction is expected to close in December 2024, subject to regulatory approval and other customary closing conditions.

For 39 years, Daugherty has been committed to driving innovation, growth and customer satisfaction while making a positive difference in the community. For CGI, the merger with Daugherty establishes significant combined geographic presence in targeted U.S. markets, deepens industry expertise and enhances strategic advisory services with offerings around digital engagement, technology modernization, cloud transformation, and FinOps and sustainability.

The merger with CGI enables Daugherty clients to retain local relationships and expertise while gaining access to CGI's global capabilities, network of delivery centers, and breadth of end-to-end services and solutions. Daugherty has consistently been named as the Largest IT Consulting Firm by the St. Louis Business Journal along with several top workplace recognitions across its metro markets and a 'top five in the nation' distinction in 2024 for the Top Workplaces USA.

"At the heart of our strategic vision is a dual commitment: to our clients and our teammates," said Ron Daugherty, Daugherty President and CEO. "We're forging a path with CGI that expands global capabilities, creates meaningful professional opportunities, and amplifies our collective potential to drive innovation and positive change in our communities."

Giving back to the communities in which CGI and Daugherty live and work is also a shared commitment, as evidenced by CGI's commitment to support of The Daugherty Foundation which will provide access to education, mentorship and career opportunities for young people and underrepresented groups in technology. 

"The combined strength of Daugherty and CGI creates additional value for clients through deep industry insight and technology expertise, with a strong commitment and proven history of delivering trusted business outcomes," said Vijay Srinivasan, CGI President of U.S. Commercial and State Government operations. "CGI and Daugherty are a great cultural fit as both companies share a strong commitment to their people and communities, a dedication to management fundamentals and a passion for excellence in execution for clients."

In the U.S., CGI has operations across 80 offices which are organized through a metro market proximity model and supported by the depth of the company's international presence, range of services, and insights to deliver value locally.

About CGI

Founded in 1976, CGI is among the largest independent IT and business consulting services firms in the world. With 90,250 consultants and professionals across the globe, CGI delivers an end-to-end portfolio of capabilities, from strategic IT and business consulting to systems integration, managed IT and business process services and intellectual property solutions. CGI works with clients through a local relationship model complemented by a global delivery network that helps clients digitally transform their organizations and accelerate results. CGI Fiscal 2024 reported revenue is $14.68 billion and CGI shares are listed on the TSX (GIB.A) and the NYSE (GIB). Learn more at cgi.com.

View original content:https://www.prnewswire.com/news-releases/cgi-expands-operations-in-multiple-us-metro-markets-with-daugherty-302329421.html

SOURCE CGI Inc.

FAQ

What is the expected closing date for CGI's merger with Daugherty?

The merger is expected to close in December 2024, subject to regulatory approval and customary closing conditions.

How many consultants will join CGI through the Daugherty merger?

More than 1,100 consultants from Daugherty will join CGI through the merger.

Which U.S. markets will be strengthened by CGI's merger with Daugherty?

The merger will strengthen CGI's presence in St. Louis, Atlanta, Minneapolis, Chicago, Columbus, Dallas, and New York.

What industries will CGI expand into through the Daugherty merger?

The merger will expand CGI's presence in financial services, healthcare, communications, retail, and manufacturing sectors.

What new capabilities will CGI gain from the Daugherty merger?

CGI will gain enhanced capabilities in artificial intelligence, data analytics, strategic IT consulting, and business advisory services.