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CGI’s Latest Acquisition to Expand Federal IT Support

By bringing TeraThink’s application development and data analytics to its federal government subsidiary, CGI continues its strategy of using mergers and acquisitions to build end-to-end solutions.

One of the world’s biggest IT consulting firms intends to strengthen its offerings to the U.S. federal government through the acquisition of Virginia-based competitor TeraThink.

According to a news release this week, CGI has signed an agreement with TeraThink for a deal expected to close by the end of the month, the terms of which have not been disclosed. The announcement described the merger as a way to bolster CGI’s federal subsidiary, CGI Federal, by combining its broad range of IT services with TeraThink’s agile enablement, application development and data analytics capabilities. Purportedly, the result will be CGI offering greater expertise and application development to federal customers.

"TeraThink and its approximately 250 professionals have made significant contributions for their federal government clients," said CGI President and CEO George Schindler in a statement. "Through combined portfolios, we strengthen our capabilities and broaden our offerings to meet the growing digitization needs of federal agencies."

Merging with other companies to create more unified, end-to-end solutions has been a core, explicit part of CGI’s strategy for decades. The company’s website says it gained more than half of its consultants that way, having completed nine mergers in the last two years and 89 since going public in 1986.

CGI’s acquisition of a company whose primary business comes from federal departments and defense contracts suggest a continued focus on that sector. CGI’s website says it has been serving state and local governments in some capacity since the company’s founding in 1976, and has worked on projects in 46 states and 200 local governments, plus most provinces in Canada and regional clients throughout Europe and Australia. But the website lists dozens of tools aimed at private and federal clients, and three for state and local: one for case management, one for debt recovery and one for enterprise resource planning.