AMS divided into parts

American Management Systems Inc. is being divided into parts in a deal with CGI Group Inc. of Montreal and CACI of Arlington, Va.

CACI will buy the company's defense and intelligence group for $415 million in cash. Meanwhile, CGI Group bought the rest of the company for $858 million in cash, or about $19.40-per-share, according to the company.

"This acquisition further strengthens CACI's core capabilities in defense and intelligence and adds a broad cross-section of offerings which will significantly expand our solution set," said Ken Johnson, CACI's president of U.S. operations. "Through this transaction we will increase the number of CACI employees with security clearances by more than 900. The capabilities of our expanded company will allow CACI to provide even more comprehensive services and solutions at every step of our clients' business processes."

The closing of deal is conditional on both parts of the deal closing, company officials said. The transactions are also subject to regulatory and government approvals.

Serge Godin, chairman and CEO of CGI, will be chairman and CEO of the combined entity, which will be known in the United States as CGI-AMS.

"By joining forces with AMS, we will now become a billion-dollar player in the United States and, given our complementary solutions and service offering, we will be better positioned to help our customers maximize the value of their information technology," Godin said.

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