Transactions

September 2 2005

Silver Oak Solutions Acquired By CGI

Company Description

Founded in 1999, a privately-held corporation with over 100 senior-level professionals and offices in Boston, New York, Philadelphia, and San Francisco, Silver Oak Solutions quickly emerged as a leading provider of Spend Management solutions used to identify, create, and sustain measurable cost savings in procurement spending for clients in the government and commercial sectors. Spend Management transforms disparate transactional data residing in ERP, accounts payable, general ledger, and operational databases into intelligent, actionable information and improved business processes delivering significant bottom-line savings.

Silver Oak Solutions has successfully analyzed over $150 billion in spending and sourced $10 billion in spending delivering $2 billion in annual, cash savings (~ 20%). Through the development of its own proprietary Spend Management offerings called PRISM®, the Company grew from under $1 million in revenue in 1999 to over $23 million in 2005. During this period, Silver Oak Solutions emerged as the pioneer and clear market leader in the government / public sector, which represents a $100 billion total market opportunity and is the single largest vertical industry for Spend Management.

Objectives

Silver Oak Solutions is a highly specialized firm that is deeply committed to its Spend Management area of expertise and focus. Due to TripleTree’s extensive research in the Spend Management sector, in-depth viewpoints on the strategic point of leverage with Silver Oak’s highly specialized offerings, and past transactional successes in this space, the Company retained TripleTree as its exclusive advisor to evaluate various strategic growth options, including a sale.

TripleTree’s research revealed that there were very few firms with Silver Oak’s demonstrated excellence in Spend Management activities and services and that there were no other privately-held, pure-play firms with a deep commitment and demonstrated expertise devoted to the public sector. After extensive analysis of the possible options for Silver Oak, TripleTree recommended that Silver Oak consider the merit of a sale to a strategic party seeking a “growth platform” in its sector for the following reasons:

- Spend Management is perhaps the largest, but most unknown ROI proposition in the entire technology, consulting, and outsourcing sectors with over $20 trillion spent worldwide on direct and indirect goods and services with every dollar cost reduction translating into significant bottom-line savings;

- Government Spend Management is the single largest vertical industry with conservatively over $100 billion in annual savings potential to be gained by the public sector. This is perhaps one of the most appealing value propositions in this entire industry, where other cost savings alternatives include raising taxes, cutting government programs, or eliminating staff, which typically result in political confrontation;

- Ability to leverage the Company’s resources, past successes, and PRISM® technology into the growing commercial sector with one of the single best ROI propositions;

- Valuable point of entry for full-scale procurement Business Process Outsourcing (BPO) or other outsourcing arrangements including Information Technology Outsourcing (ITO), where other outsourcing firms have failed to gain a foothold;

- Some of the most highly skilled strategic sourcing professionals and Spend Management experts with prior, senior-level positions held at Mitchell Madison, KPMG, McKinsey & Company, Deloitte Consulting, and Global 1000 companies including General Electric

As a highly differentiated, market leader with a history of success and profitability in it's sector, it was evident to TripleTree that Silver Oak Solutions would be a highly attractive “growth platform” for global acquirers seeking to establish a dominant industry position.

Results

TripleTree led a strategic evaluation process that ultimately led to a “game-changing” industry move combining the strength of Silver Oak Solutions’ PRISM® spend analysis, strategic sourcing and compliance Spend Management expertise with CGI Group’s global footprint and outsourcing excellence. CGI Group, Inc. (NYSE:GIB) is the largest independent information technology and business process services firm in North America with approximately 25,000 professionals and an annualized revenue run rate currently at CDN $3.8 billion (U.S. $3.0 billion) at June 30, 2005. Silver Oak Solutions represents a key cornerstone for CGI Group’s global outsourcing and BPO ambitions.

TripleTree facilitated a process that led to multiple competitive offers from other global outsourcing and technology firms, leading supplier content providers, and top-tier management and IT consulting firms before finally aiding Silver Oak in its selection and alignment with CGI Group. TripleTree provided expert advice throughout the engagement process that included orchestrating a highly complex transaction involving key management and employee considerations as well as outside investors and capital sponsors. After leading a competitive process, CGI represented the best opportunity by meeting all shareholder expectations and positioning Silver Oak Solutions as strategically able for long-term industry growth and dominance.