Quebec technology firm CGI Inc. sees a “pretty perfect” environment for acquisitions after a selloff in the sector made the price of potential targets more reasonable, company executives said. 

The Montreal-based IT and business consulting company expects to meet a target of making $1 billion (US$776 million) in deals this year, Chief Executive Officer George Schindler said on a conference call with analysts Wednesday. 

“Valuations are coming down, and quite frankly there is a bit less competition given that the cost of capital is increasing,” he said. The S&P 500 Information Technology sector index has fallen 21 per cent so far this year. CGI is down less than 4 per cent. 

The timing for acquisitions, a major part of CGI’s growth strategy, “is starting to be pretty perfect,” Chief Financial Officer Francois Boulanger added. “We are putting even more people on this and we’re seeing good opportunity for the future.”

Management can count on $2.3 billion of cash with access to more if needed, Boulanger said. 

EPS GROWTH

CGI said revenue grew 8 per cent to $3.26 billion (US$2.5 billion) in the fiscal third quarter ended June 30, as it sees strong demand for its services. About a third of revenue came from government customers; another 24 per cent was from financial services clients. 

The company slightly beat analysts’ estimates by earning $1.54 a share on an adjusted basis, up 13 per cent from last year. 

CGI executives also said they remain confident even as the global economy encounters headwinds. “It’s not changing businesses’ resolve around where they want to go with IT,” Schindler said. But bookings -- a measure of contract wins, extensions and renewals -- were down by $224 million to $3.41 billion year-over-year.

Consultants and professionals increased by more than 10,500 to 88,500 worldwide over the year. “The hiring of new talent at all experience levels remains at a record high,” said Schindler.