Sept. 8 (Bloomberg) -- CGI Group Inc., Canada’s biggest computer-services company, is prepared to spend C$2 billion ($1.86 billion) on acquisitions in Europe and the U.S., its chief executive officer said.

Company valuations “have come down significantly in Europe, they have also come down in North America,” Michael Roach said in an interview last week. “We have the capability to execute a very significant acquisition or series of acquisitions. The challenge is to find the right one.”

CGI, based in Montreal, is looking to tap the growing demand for computer services in the U.S. and Western Europe amid the recession as companies look to save money by automating and outsourcing work. The company, which now gets 57 percent of revenue from Canada, aims to derive 60 percent from outside the country over the next three to five years, Roach said.

Roach, 57, said he isn’t concerned about a takeover bid from larger competitors such as IBM Inc. and Accenture Plc.

“We see ourselves as a very viable alternative to what I would call the older established players, and clients are looking for alternatives,” he said.

CGI’s customers include London-based bank Barclays Plc, Philadelphia-based health and life insurer Cigna Corp., U.S. federal government agencies and state and provincial governments across North America.

‘Significant Acquisition’

CGI had C$272 million in cash and C$1.35 billion in untapped credit at the end of its last quarter, according to a July statement. “We could certainly do a significant acquisition,” Roach said. “In the range of between one and two billion and perhaps more.”

While Roach declined to name any companies it is considering buying, he said CGI is “constantly in discussions with potential targets.” The company’s most recent acquisition was its 2007 purchase of Codesic Consulting for about C$11 million, according to Bloomberg data.

CGI rose 13 cents to C$11.53 at 4:10 p.m. on the Toronto Stock Exchange, the highest in more than a year. The stock has climbed 20 percent this year.

To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net

Last Updated: September 8, 2009 16:30 EDT