Information technology company CGI Group Inc. (TSX:GIB.A) is buying American IT firm Stanley Inc. for $903 million in cash in a deal it says will give a big boost to its U.S. operations and expand its access to lucrative U.S. government contracts in the defence and intelligence markets.

The Montreal-based company said Friday it will pay $37.50 per share for Stanley, a premium of 29 per cent from Stanley's Thursday closing price of $29 on the New York Stock Exchange.

"The acquisition of Stanley is in line with our build-and-buy profitable growth strategy and is consistent with our commitment to continue expanding our footprint in the strategic U.S. market and specifically in the U.S. federal market," president and CEO Michael Roach said in a statement.

"It is also consistent with our commitment to bring increased value to our clients and employees. From an investor perspective, this transaction will be accretive to GAAP earnings per share within the first 12 months."

The companies said their boards have approved the sale and Stanley directors and executives have pledged to vote their shares in support of the deal.

Stanley, based in Arlington, Va., provides systems and professional service support to the U.S. government. CGI said it will make Stanley part of its CGI Federal unit, which does business with the U.S. government and defence, intelligence, and civilian agencies.

CGI will tender an offer for Stanley shares in the fall. It plans to pay for Stanley with cash on hand and funds from its existing credit facilities. It expects the acquisition to add to its profit within the first year of closing.

CGI will need approval from antitrust regulators and Stanley shareholders to complete the deal.

The combined company will have $4.5 billion in annual revenue, CGI said. In January, Stanley forecast annual revenue of $868 million to $876 million.

Stanley shares are up about 30 per cent since mid-February, when they were trading at annual lows.