KippsDeSanto & Co. Advises Irving Burton Associates on its sale to DLH Corp

KippsDeSanto & Co. Advises Irving Burton Associates on its sale to DLH Corp

KippsDeSanto & Co. is pleased to announce the sale of its client, Irving Burton Associates (“IBA” or the “Company”), to DLH Holdings Corp. (NASDAQ: DLHC) (“DLH”).
Founded in 1979 and based in Falls Church, VA, IBA is a leading provider of innovative healthcare research, services and solutions to the Defense Health Agency (“DHA”), the Telemedicine & Advanced Technology Research Center (“TATRC”) of the US Army’s Medical Research and Development Command (“USAMRDC”), and other health-focused agencies within the U.S. Department of Defense (“DoD”). IBA maintains a top-secret facility clearance, and its defense contracts provide for a range of health IT services including digital transformation, data analytics, cybersecurity, and artificial intelligence (“AI”).

We believe this transaction illustrates various trends in the government technology M&A environment:

  • Strong strategic buyer interest in well-positioned, targets providing high priority support to health-related Federal customers
  • Demand for companies with embedded positions and long-term relationships on key programs within well-funded customers
  • Buyers continue to place emphasis on targets with larger, prime, full and open contracts

 About KippsDeSanto & Co.

KippsDeSanto & Co. is an investment banking firm focused on serving growth-oriented Aerospace / Defense, Government Services and Technology companies. We are focused on delivering exceptional M&A and Financing transaction results to our clients via leveraging our scale, creativity and industry experience. We help market leaders realize their full strategic value. Having advised on over 100 industry transactions, KippsDeSanto is recognized for our analytical rigor, market insight, and broad industry relationships. There’s no substitute for experience.  For more information, visit www.kippsdesanto.com.

Investment Banking products and services are offered through KippsDeSanto & Co., a non-bank subsidiary of Capital One, N.A., a wholly-owned subsidiary of Capital One Financial Corporation, and a member of FINRA and SIPC. Products and services are Not FDIC insured, Not Bank Guaranteed, May Lose Value, Not a Deposit, and Not Insured by Any Federal Government Agency.

Press Release

DLH Acquires IBA to Bolster its DoD Health Technology Capabilities

Atlanta, Georgia – October 1, 2020

DLH Holdings Corp. (NASDAQ: DLHC) (“DLH” or the “Company”), a leading provider of innovative healthcare research, services and solutions to the federal government, today announced that it has acquired privately-held Irving Burton Associates, LLC (“IBA”) of Falls Church, Virginia. The firm, with approximately 115 employees, provides research, systems development, and other technology-enabled solutions to the Defense Health Agency (“DHA”), the Telemedicine & Advanced Technology Research Center (“TATRC”) of the US Army’s Medical Research and Development Command (“USAMRDC”), and other agencies within the U.S. Department of Defense (“DoD”). IBA maintains a top-secret facility clearance, and its defense contracts provide for a range of health IT services including digital transformation, data analytics, cybersecurity, and artificial intelligence (“AI”).

IBA was purchased for $32.0 million in cash, or $26.5 million net of transaction-related tax benefits worth approximately $5.5 million on a net present value basis. DLH estimates that IBA will contribute annualized revenue of approximately $25 million to the Company going forward, and the firm’s backlog was approximately $143 million at closing. IBA will be a wholly owned subsidiary of DLH Holdings Corp. and a part of DLH’s Mission Services & Solutions operating unit led by Helene Fisher (former US Army Signal Corps). IBA’s current president, Mary Dowdall, will remain with DLH in leadership of the IBA organization.

“IBA complements our capabilities and enhances our readiness profile for military and other agency business through research, analytics, and advancing technologies,” said Zachary Parker, DLH President & CEO. “For several decades IBA has leveraged its expertise in program management, research and engineering, and health data analytics to expand its business in support of agencies in the Military Health System (MHS). We are confident that IBA will strengthen our growth outlook and bring new opportunities in technology-enabled healthcare solutions. I am proud to have IBA join the DLH family of operations.”

“We believe that DLH is an ideal partner for IBA, from both a business and cultural perspective” added Mary Dowdall, President of Irving Burton Associates. “Our employees will appreciate and embrace the collective spirit, shared objectives, and expanding opportunities that our combined organization will bring. We look forward to aligning our mutual commitment and mission-driven focus to deliver technology-enabled services to federal government agencies.”

DLH financed the acquisition through an amendment to its existing secured credit facility. Borrowing availability was provided by debt prepayments facilitated by the Company’s ongoing cash generation. First National Bank of Pennsylvania acted as agent, and F.N.B. Capital Markets and M&T Bank acted as joint lead arrangers. The credit facility was comprised of a syndicated term loan of $70 million and revolving credit facility of $25 million. All bank members of the syndicated credit facility committed funding to their original loan amounts. Additional terms of the transaction and financing arrangements will be available in the Company’s SEC filings.

KippsDeSanto & Co. Advises Alliance Spacesystems, a subsidiary of SolAero Technologies Corp., on its sale to Applied Composites

KippsDeSanto & Co. advises Alliance Spacesystems, a subsidiary of SolAero Technologies Corp., on its sale to Applied Composites

KippsDeSanto & Co. is pleased to announce the divestiture of its client, Alliance Spacesystems (“Alliance” or the “Company”) from SolAero Technologies Corp. to Applied Composites, a portfolio company of AE Industrial Partners.

Headquartered in Los Alamitos, California, Alliance provides high-precision composite payload structures for use in satellite buses, antenna reflectors, booms, and support structures for use in both military and commercial satellite applications. As a qualified supplier for Boeing, Lockheed Martin, and Northrop Grumman, among others, the Company offers end-to-end composite manufacturing services, to include engineering, manufacturing, integration, and final qualification testing. The Company’s full suite of composite structure capabilities, state-of-the-art facilities in Los Alamitos and San Diego, and deep customer relationships uniquely position Alliance to complement Applied Composites existing capabilities and accelerate the combined company’s growth.

 

 

We believe this transaction demonstrates several key trends in the aerospace and defense M&A market:

  • Continued interest and investment in the space end market
  • Demand for companies with entrenched position on well-funded programs, and the customer relationships needed to maintain that positioning
  • Value creation through the realization of operational and production synergies
  • Sustained private equity M&A activity in essential industries despite COVID-19 and associated macroeconomic uncertainty

 About KippsDeSanto & Co.

KippsDeSanto & Co. is an investment banking firm focused on serving growth-oriented Aerospace / Defense, Government Services and Technology companies. We are focused on delivering exceptional M&A and Financing transaction results to our clients via leveraging our scale, creativity and industry experience. We help market leaders realize their full strategic value. Having advised on over 100 industry transactions, KippsDeSanto is recognized for our analytical rigor, market insight, and broad industry relationships. There’s no substitute for experience.  For more information, visit www.kippsdesanto.com.

Investment Banking products and services are offered through KippsDeSanto & Co., a non-bank subsidiary of Capital One, N.A., a wholly-owned subsidiary of Capital One Financial Corporation, and a member of FINRA and SIPC. Products and services are Not FDIC insured, Not Bank Guaranteed, May Lose Value, Not a Deposit, and Not Insured by Any Federal Government Agency.

KippsDeSanto & Co. advises Transformational Security, LLC and Intelligent Devices, Inc. on their sale to HEICO Corporation

KippsDeSanto & Co. advises Transformational Security, LLC and Intelligent Devices, Inc. on their sale to HEICO Corporation

KippsDeSanto & Co. is pleased to announce the sale of its clients, Transformational Security, LLC and Intelligent Devices, Inc. (“TS,” “ID,” or the “Companies”), to HEICO Corporation (“HEICO”).

Headquartered in Columbia, MD, TS is a leading security technology company that designs, develops, manufactures and supports state-of-the-art detection and monitoring systems and sensors used to protect critical spaces from exploitation via wireless transmissions. TS’ solutions detect, identify and analyze an array of threats posed in communications, information and radio frequency security in support of its clients most exacting Technical Surveillance Countermeasures (“TSCM”), Counterintelligence, and Electromagnetic Spectrum Operations (“EMSO”) requirements. The Company’s proprietary, highly specialized hardware and software technology is used by its broad customer base across well-funded markets and applications including intelligence, military, law enforcement, government agencies, and the private sector.

Founded in 1995, ID provides state-of-the-art audio solutions to the enterprise, commercial, government and law enforcement communities in support of their most mission critical communications security requirements. Its highly specialized, revolutionary solutions and systems combine hardware, software and complex, proprietary algorithms with over fifty years of true expertise in audio recording, enhancement, and speech processing.

The HEICO family of companies is known for high quality and performance in providing products and services to niche segments within the aviation, defense, space, medical, telecommunications, and electronics industries. HEICO entered the TSCM field in June 2019 when it acquired Research Electronics International (“REI”). While TS and ID will remain separate businesses from REI, adding the Companies’ complementary capabilities and technologies will help TS, ID, and REI realize synergies from their respective teams’ collaboration, customer and market access to develop new technology and offer unique, expanded product offerings to customers.

We believe this transaction highlights several key trends in the cybersecurity and defense electronics M&A market:

  • Strategic buyers recognize the value of proprietary technology and highly engineered and differentiated solutions
  • Continued demand for innovative companies that offer integrated hardware and software-based solutions, utilizing technologies that are approved to sell to a broad market, including U.S. and international government, military, intelligence, law enforcement, and commercial enterprises
  •  Attractiveness of deeply embedded installed base and long-term relationships with hard-to-penetrate customers across multiple well-funded market segments
  •  Significant value attributed to operational synergies, complementary technology, customer relationships, and market know-how that represent significant opportunity for growth

 About KippsDeSanto & Co.

KippsDeSanto & Co. is an investment banking firm focused on serving growth-oriented Aerospace / Defense, Government Services and Technology companies. We are focused on delivering exceptional M&A and Financing transaction results to our clients via leveraging our scale, creativity and industry experience. We help market leaders realize their full strategic value. Having advised on over 100 industry transactions, KippsDeSanto is recognized for our analytical rigor, market insight, and broad industry relationships. There’s no substitute for experience.  For more information, visit www.kippsdesanto.com.

Investment Banking products and services are offered through KippsDeSanto & Co., a non-bank subsidiary of Capital One, N.A., a wholly-owned subsidiary of Capital One Financial Corporation, and a member of FINRA and SIPC. Products and services are Not FDIC insured, Not Bank Guaranteed, May Lose Value, Not a Deposit, and Not Insured by Any Federal Government Agency.

Press Release

HEICO Corporation Acquires Two Preeminent Surveillance Countermeasures Companies

Purchases are HEICO’s 4th and 5th acquisitions in this fiscal year to date

August 12, 2020 08:30 AM Eastern Daylight Time

MIAMI & COLUMBIA, Md.–(BUSINESS WIRE)–HEICO Corporation (NYSE: HEI.A) (NYSE: HEI) today announced that its Electronic Technologies Group acquired Intelligent Devices, Inc. (“ID”) and Transformational Security, LLC (“TS”) from their founder-owner-managers for cash at closing, plus potential additional cash consideration to be paid if certain post-closing earnings levels are attained. Further financial details were not disclosed.

HEICO stated that it expects the acquisitions to be accretive to its earnings within the first twelve months after closing. The acquisitions are HEICO’s fourth and fifth acquisitions in its current fiscal year, as well as being HEICO’s second and third acquisitions since the COVID-19 pandemic’s start.

ID, which was founded in 1995 by Edmund Pirali, and TS, which was founded in 2004 by Jon Whittingham, are leading security technology companies that design, develop, manufacture and support state-of-the-art detection and monitoring systems used to protect critical spaces from exploitation via wireless transmissions, technical surveillance, and listening devices. Their products include hardware and software which detect, identify and analyze an array of threats posed in cellular communication security, information security and radio frequency security.

ID and TS offer these solutions, commonly known as Technical Surveillance Countermeasures, or TSCM, to well-funded markets and applications, including intelligence, military, law enforcement, government agencies and the private sector. HEICO believes that emerging technologies and continued espionage desires by many governments, companies and people render this an important and growing market.

Although ID and TS are separate companies, Mr. Pirali and Mr. Whittingham partnered their companies in 2010 when they became roughly equal owners in each other’s company in order to share certain resources and jointly develop critical technologies. The two companies, which together employ approximately 50 people, are co-located in state-of-the-art facilities in Columbia, MD and share extensive resources.

Mr. Whittingham will serve as the firms’ President and Mr. Pirali will serve as their Vice President. HEICO stated that it does not expect any staff turnover to result from the acquisition and stated that the businesses shall continue to operate from their existing location. HEICO expects that the two companies will be fully combined within a reasonable time after the closing, though no timetable has been set, and HEICO emphasized that it does not anticipate any changes to staff, location, products or services to result from this mostly administrative change.

HEICO entered the TSCM field in June 2019 through its acquisition of 75% of market-leader Research Electronics International (“REI”) from its founder-managers, Tom Jones and Bruce Barsumian, who continue to own the remaining 25% of REI. Mr. Jones and Mr. Barsumian acquired 25% of ID and TS by contributing their proportionate share of the cash investment, with HEICO acquiring 75% of ID and TS. ID and TS will report to Mr. Jones, though they will remain separate businesses from REI while cooperating on developing new technology and offering unique expanded product offerings to customers.

 

Laurans A. Mendelson, HEICO’s Chairman and Chief Executive Officer, along with Victor H. Mendelson, HEICO’s Co-President and Chief Executive Officer of its Electronic Technologies Group, and Mr. Jones, jointly commented, “We welcome Edmund, Jon and all of the Intelligent Devices and Transformational Security Team Members to our HEICO family. The crucial TSCM field provides vital equipment and services to keep sensitive information from reaching the wrong hands and we are excited about the potential for all of our companies to bring great products to our customers.”

Mr. Pirali and Mr. Whittingham jointly remarked, “Transformational Security and Intelligent Devices are proud to be joining the HEICO family of companies. HEICO represents a philosophy of excellence, innovation and customer service that are at the core of TS and ID products and technologies. Partnering with HEICO extends and enhances our commitment to our customers. We look forward to continuing to serve our customers within the umbrella of a larger group, while maintaining our culture, customer service, and the unique capabilities TS and ID bring to counterintelligence, SIGINT, and spectrum operations customers.”

HEICO Corporation is engaged primarily in the design, production, servicing and distribution of products and services to certain niche segments of the aviation, defense, space, medical, telecommunications and electronics industries through its Hollywood, Florida-based Flight Support Group and its Miami, Florida-based Electronic Technologies Group. HEICO’s customers include a majority of the world’s airlines and overhaul shops, as well as numerous defense and space contractors and military agencies worldwide, in addition to medical, telecommunications and electronics equipment manufacturers. For more information about HEICO, please visit our website at http://www.heico.com.

Certain statements in this press release constitute forward-looking statements, which are subject to risks, uncertainties and contingencies. HEICO’s actual results may differ materially from those expressed in or implied by those forward-looking statements as a result of factors including: the severity, magnitude and duration of the COVID-19 outbreak; HEICO’s liquidity and the amount and timing of cash generation; the continued decline in commercial air travel caused by the COVID-19 outbreak, airline fleet changes or airline purchasing decisions, which could cause lower demand for our goods and services; product specification costs and requirements, which could cause an increase to our costs to complete contracts; governmental and regulatory demands, export policies and restrictions, reductions in defense, space or homeland security spending by U.S. and/or foreign customers or competition from existing and new competitors, which could reduce our sales and profitability; our ability to introduce new products and services at profitable pricing levels, which could reduce our sales, sales growth or profitability; product development or manufacturing difficulties, which could increase our product development and manufacturing costs and delay sales; our ability to make acquisitions and achieve operating synergies from acquired businesses; customer credit risk; interest, foreign currency exchange and income tax rates; economic conditions within and outside of the aviation, defense, space, medical, telecommunications and electronics industries, which could negatively impact our costs and revenues; and defense spending or budget cuts, which could reduce our defense-related revenue and profitability. Parties reading this press release are encouraged to review all of HEICO’s filings with the Securities and Exchange Commission, including, but not limited to filings on Form 10-K, Form 10-Q and Form 8-K. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.

KippsDeSanto & Co. Advises Chemring Group PLC on the Sale of Chemring Ordnance, Inc. to Nammo Defence Systems Inc.

KippsDeSanto & Co. Advises Chemring Group PLC on the Sale of Chemring Ordnance, Inc. to Nammo Defence Systems Inc.

KippsDeSanto & Co. is pleased to announce that it has advised on the sale of Chemring Ordnance, Inc. (“COR” or the “Company”), a subsidiary of CHG Group, Inc., to Nammo Defence Systems Inc.  The transaction expands Nammo’s customer access, while helping our client, Chemring Group PLC (LSE:CHG), pursue its strategic portfolio shaping initiatives.

Based in Perry, FL, COR manufactures a range of ordnance and pyrotechnic products primarily for the U.S. Department of Defense, as well as foreign defense agencies.  The Company’s flagship product is utilized for counter-Improvised Explosive Device (“IED”) requirements, allowing its operators to quickly and safely deploy a system to neutralize potential minefields and similar threats.  COR also produces a variety of ammunition products utilized in land and sea missions, along with fuzing for various grenade systems.  In addition to its suite of products, the Company offers ammunition design, testing, and load, assemble, and pack (“LAP”) services.  With its extensive product line and intimate customer relationships, the Company is favorably poised to accelerate its overall growth and development.  The transaction was originally announced on November 21, 2019; it closed on May 6, 2020, subsequent to regulatory requirements.

We believe this transaction demonstrates several key trends in the aerospace and defense M&A environment:

  • Continued use of divestitures for portfolio shaping in line with shifting strategic plans
  • Intrinsic value of entrenched customer relationships throughout the defense industrial base
  • Driving value through the ability to realize operational and production synergies

About KippsDeSanto & Co. KippsDeSanto & Co. is an investment banking firm focused on serving growth-oriented Aerospace / Defense, Government Services and Technology companies. We are focused on delivering exceptional M&A and Financing transaction results to our clients via leveraging our scale, creativity and industry experience.  We help market leaders realize their full strategic value.  Having advised on over 100 industry transactions, KippsDeSanto is recognized for our analytical rigor, market insight, and broad industry relationships.  There’s no substitute for experience.  For more information, visit www.kippsdesanto.com.

Investment Banking products and services are offered through KippsDeSanto & Co., a non-bank subsidiary of Capital One, N.A., a wholly-owned subsidiary of Capital One Financial Corporation, and a member of FINRA and SIPC. Products and services are Not FDIC insured, Not Bank Guaranteed, May Lose Value, Not a Deposit, and Not Insured by Any Federal Government Agency.

Press Release – May 07, 2020

Completion of disposal

On 21 November 2019 Chemring announced that it had entered into a conditional agreement to sell its US subsidiary Chemring Ordnance, Inc. to Nammo Defense Systems Inc. for a cash consideration of $17 million. The sale was subject to both regulatory approval by the US authorities and a working capital adjustment on completion.

Chemring is pleased to announce today that all regulatory approvals have now been received and the sale process has now completed.

The final working capital adjustment will be agreed in the next 60 days in accordance with the sale and purchase agreement, but at this stage, the net proceeds are expected to be approximately $15 million. These proceeds will be used by the Group for general corporate purposes.

 

KippsDeSanto & Co. advises InCadence Strategic Solutions on its sale to Xator Corporation

KippsDeSanto & Co. advises InCadence Strategic Solutions on its sale to Xator Corporation

KippsDeSanto & Co. is pleased to announce the sale of its client, InCadence Strategic Solutions (“InCadence” or the “Company”), to Xator Corporation (“Xator”).

Established in 2009 and headquartered in Manassas, Virginia, InCadence provides customers with cutting-edge biometrics / identity management, intelligence operations, information management / data solutions, and tactical communications products, tools, and technology enabled solutions.  The Company’s customer base spans across various military, intelligence, and law enforcement agencies supporting state-of-the-art platforms, robust information exchange systems, engineering, and subject matter expertise for numerous mission needs.

This transaction reinforces Xator’s position as a customer-first organization with a proven record of exceptional performance in providing C4ISR, national security, and intelligence solutions to its U.S. Government partners.

We believe this transaction highlights several key trends in the current government services M&A market:

  • Despite market turbulence, M&A deals are still being completed between experienced industry buyers and well-positioned, highly coveted targets;
  • Heightened demand exists for firms with highly differentiated solutions that leverage unique proprietary tools and technologies; and
  • Buyers placing significant importance on targets with deep and tenured past performance across sought after and well-funded DoD, intelligence, and law enforcement customers

About KippsDeSanto & Co. KippsDeSanto & Co. is an investment banking firm focused on serving growth-oriented Aerospace / Defense, Government Services and Technology companies. We are focused on delivering exceptional M&A and Financing transaction results to our clients via leveraging our scale, creativity and industry experience. We help market leaders realize their full strategic value. Having advised on over 100 industry transactions, KippsDeSanto is recognized for our analytical rigor, market insight, and broad industry relationships. There’s no substitute for experience.  For more information, visit www.kippsdesanto.com.

Investment Banking products and services are offered through KippsDeSanto & Co., a non-bank subsidiary of Capital One, N.A., a wholly-owned subsidiary of Capital One Financial Corporation, and a member of FINRA and SIPC. Products and services are Not FDIC insured, Not Bank Guaranteed, May Lose Value, Not a Deposit, and Not Insured by Any Federal Government Agency.

Press Release

Xator Corporation Acquires InCadence Strategic Solutions

April 30, 2020 – Today, Xator Corporation has completed its acquisition of InCadence Strategic Solutions Corp, a Northern Virginia-based provider of cutting-edge technical products, intelligence support, and high-end engineering services to government and commercial clients. Founded in 2009, InCadence is a leader in biometrics and identity management, big data solutions, tactical communications, and operational intelligence.

“InCadence’s proven ability to leverage its deep domain experience, differentiated by its software and hardware, into customer-focused solutions will catalyze growth opportunities when joined with Xator,” said David Scott, Xator’s CEO. “Xator’s acquisition of InCadence represents a very exciting combination of technical expertise and intellectual property, which will continue to serve our complementary client sets for years to come.”

“InCadence is thrilled to be joining the Xator family,” said Sandy Corbett, Chairman and CEO of InCadence. “As I have come to know David Scott and Xator, it is clear that our strong cultural fit, complementary capabilities, and client focus will result in a compelling value proposition for our employees, customers and partners alike. I look forward to seeing the tremendous growth and innovation opportunities that lie ahead for our combined entity!”

This transaction reinforces Xator’s position as a leading provider of C4ISR, national security, and intelligence solutions to its U.S. Government partners.

KippsDeSanto & Co. Advises TeraThink on its Sale to CGI, Inc

KippsDeSanto & Co. Advises TeraThink on its Sale to CGI, Inc 

 KippsDeSanto & Co. is pleased to announce the sale of its client, TeraThink Corporation  (“TeraThink” or the “Company”), to CGI, Inc. (“CGI”).

Headquartered in Reston, VA, TeraThink is a purpose-built digital transformation, ERP implementation, and technology solutions provider specializing in automation, agile development, enterprise application technologies, data analytics, optimization, and cloud computing.  TeraThink delivers digital transformations by modernizing and integrating mainstream IT and deploying digital solutions at scale to produce better business outcomes for federal civilian, national security, and defense customers. The Company merged with Dominion Consulting in November 2017.

This acquisition strengthens CGI Federal’s position as an end-to-end enterprise application services provider with the additional management consulting and digital transformation capabilities that TeraThink brings to the table.

We believe this acquisition demonstrates several key trends in the government services market:

  • Strong demand for technology-driven, next-generation IT service companies;
  • Importance of a full and open contract profile with visible backlog;
  • Focus on high-growth businesses with proven scale, relevant past performance, and sustainable, recurring revenue and profitability; and
  • Significant value attributed to deeply-embedded customer relationships and market know-how

 About KippsDeSanto & Co.

KippsDeSanto & Co. is an investment banking firm focused on serving growth-oriented Aerospace / Defense, Government Services and Technology companies. We are focused on delivering exceptional M&A and Financing transaction results to our clients via leveraging our scale, creativity and industry experience. We help market leaders realize their full strategic value. Having advised on over 100 industry transactions, KippsDeSanto is recognized for our analytical rigor, market insight, and broad industry relationships. There’s no substitute for experience.  For more information, visit www.kippsdesanto.com.

Investment Banking products and services are offered through KippsDeSanto & Co., a non-bank subsidiary of Capital One, N.A., a wholly-owned subsidiary of Capital One Financial Corporation, and a member of FINRA and SIPC. Products and services are Not FDIC insured, Not Bank Guaranteed, May Lose Value, Not a Deposit, and Not Insured by Any Federal Government Agency.

Press Release

CGI to Acquire TeraThink
Expands end-to-end enterprise application services for federal clients.

March 25, 2020

Fairfax, Virginia – CGI (NYSE: GIB) (TSX: GIB.A) announced its intent to acquire TeraThink, a leading information technology and management consulting firm providing digitization, enterprise finance,  risk management, and data analytics services to the U.S. federal government. The two companies signed an agreement to proceed with the transaction, which is expected to close by the end of March.

This merger will strengthen CGI Federal’s consulting expertise, and expand its enterprise application development and management services. Combining TeraThink’s agile enablement, application development, and data analytics capabilities with CGI’s Federal’s breadth of IT services will enhance offerings available to federal agencies. This merger will significantly increase the scale of enterprise applications support CGI Federal provides to all three branches of government.

“TeraThink and its approximately 250 professionals have made significant contributions for their federal government clients,” said George D. Schindler, President and Chief Executive Officer. “Through combined portfolios, we strengthen our capabilities and broaden our offerings to meet the growing digitization needs of federal agencies.”

“TeraThink and CGI Federal share a culture of delivering quality services, addressing evolving needs in partnership with our clients, and maintaining a track record of high client satisfaction and longevity,” said Tim Hurlebaus, President CGI Federal. “We look forward to welcoming the TeraThink members to the CGI team.”

About CGI Federal

CGI Federal Inc. is a wholly-owned U.S. operating subsidiary of CGI Inc., dedicated to partnering with federal agencies to provide solutions for defense, civilian, healthcare and intelligence missions. Founded in 1976, CGI is among the largest independent IT and business consulting services firms in the world. With 77,500 consultants and other 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. With Fiscal 2019 reported revenue of C$12.1 billion, CGI shares are listed on the TSX (GIB.A) and the NYSE (GIB). Learn more at www.cgi.com.

Forward-looking information and statements

This press release contains “forward-looking information” within the meaning of Canadian securities laws and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable United States safe harbors. All such forward-looking information and statements are made and disclosed in reliance upon the safe harbor provisions of applicable Canadian and United States securities laws. Forward-looking information and statements include all information and statements regarding CGI’s intentions, plans, expectations, beliefs, objectives, future performance, and strategy, as well as any other information or statements that relate to future events or circumstances and which do not directly and exclusively relate to historical facts. Forward-looking information and statements often but not always use words such as “believe”, “estimate”, “expect”, “intend”, “anticipate”, “foresee”, “plan”, “predict”, “project”, “aim”, “seek”, “strive”, “potential”, “continue”, “target”, “may”, “might”, “could”, “should”, and similar expressions and variations thereof. These information and statements are based on our perception of historic trends, current conditions and expected future developments, as well as other assumptions, both general and specific, that we believe are appropriate in the circumstances. Such information and statements are, however, by their very nature, subject to inherent risks and uncertainties, of which many are beyond the control of CGI, and which give rise to the possibility that actual results could differ materially from our expectations expressed in, or implied by, such forward-looking information or forward-looking statements. These risks and uncertainties include but are not restricted to: risks related to the market such as the level of business activity of our clients, which is affected by economic conditions, and our ability to negotiate new contracts; risks related to our industry such as competition and our ability to attract and retain qualified employees, to develop and expand our services, to penetrate new markets, and to protect our intellectual property rights; risks related to our business such as risks associated with our growth strategy, including the integration of new operations, financial and operational risks inherent in worldwide operations, foreign exchange risks, income tax laws, our ability to negotiate favorable contractual terms, to deliver our services and to collect receivables, and the reputational and financial risks attendant to cybersecurity breaches and other incidents; as well as other risks identified or incorporated by reference in this press release, in CGI’s annual and quarterly MD&A and in other documents that we make public, including our filings with the Canadian Securities Administrators (on SEDAR at www.sedar.com) and the U.S. Securities and Exchange Commission (on EDGAR at www.sec.gov). Unless otherwise stated, the forward-looking information and statements contained in this press release are made as of the date hereof and CGI disclaims any intention or obligation to publicly update or revise any forward-looking information or forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. While we believe that our assumptions on which these forward-looking information and forward-looking statements are based were reasonable as at the date of this press release, readers are cautioned not to place undue reliance on these forward-looking information or statements. Furthermore, readers are reminded that forward-looking information and statements are presented for the sole purpose of assisting investors and others in understanding our objectives, strategic priorities and business outlook as well as our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. Further information on the risks that could cause our actual results to differ significantly from our current expectations may be found in the section titled “Risk Environment” of CGI’s annual and quarterly MD&A, which is incorporated by reference in this cautionary statement. We also caution readers that the above-mentioned risks and the risks disclosed in CGI’s annual and quarterly MD&A and other documents and filings are not the only ones that could affect us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial could also have a material adverse effect on our financial position, financial performance, cash flows, business or reputation.

For more information:

Investors

Lorne Gorber

Executive Vice-President, Investor and Public Relations

lorne.gorber@cgi.com

+1 514-841-3355

Media

Jennifer Horowitz

Vice-President, Marketing & Communications

jennifer.horowitz@cgi.com

+1 202-807-9558