AMS acquired and split up; my memory has just been sold

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?

  1. 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).
  2. 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.