Tuesday, May 11, 2010

I told you so. Did I?

Even during my conference call with analysts following our Q2 results I was pestered and annoyed about the same stupid questions. I told those Brioni-clad morons that we'd buy something when the time would be right, and patience is not something you find on Wall Street these days.

As you all know by now, we've done a sizeable acquisition last week. Stanley's a great fit for CGI and the risk is very low for us. 5,000 billable people, they suck money from the U.S. government so it's not like the client will run out of money soon. They know how to get in, and we'll merge them with our Federal business unit. Did we pay too much though?

Stanley brings $865M in revenue for $126M in gross profit. That's $25,200 per drone, which is pretty similar do what we do ($654.76M in gross profit for 26,000 employee gives $25,183 per drone). This means those guys know how to press lemons and work pretty much the same way. Stanley could not care less about dividends so we're also on the same page. Dividends are for sissies.

On the downside, our profit and operating margins are a bit different and their corporate culture has some defects. Stanley was nominated a few times as "Best Places to Work" in some states, this highly suspicious event will require immediate attention from our senior management – meaning me. Happiness has a cost and it goes against the spirit of profitable growth. Call me a party pooper if you want, but unlike Happy Raymond I do not believe it is our mission to make members happy. Having said that, once we integrate their staff into our internal processes we should be able to smooth that out.

What does this mean for you members? How does this deal impact your day-to-day routine? Should you raise your expectation level about CGI? I'm happy to report that the Stanley deal won't change a thing. You'll still punch tomorrow and you'll still get a 1% raise this year. If you want to thank me for not shaking your world, the address is still fake mike roach at gmail dot com.

On a final note, the picture above is not my favorite portrait, it looks like a Klingon beamed aboard my ship and I'm very pissed off and about to knock him out with my phaser gun. But this is a favorite tie, aka crossword puzzle.

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