January 11, 2011 2:21:08 am
In a significant consolidation in the fragmented IT services market US headquartered iGate Corporation,headed by former Infosys top honcho Phaneesh Murthy,moved to pick up a 63 per cent stake in Patni Computer Systems Ltd in a deal estimated at $ 1.22 billion.
The new entity with combined revenues touching the one billion dollar mark will
look to be a major player in
providing IT services to the banking and financial services,insurance,manufacturing,retail,media and entertainment sectors.
It has been our stated intent to scale revenues,customers,and expand our vertical capability. We believe that the combination will help customers get better service,access to more service lines and deeper
pools of expertise, iGate CEO Phaneesh Murthy said in a statement.
Increased access to global customers,increased scale,leadership strength and engineering bench are cited as the key benefits to the two mid rung companies who will now rise to be among the top 10 IT firms out of India.
iGATEs subsidiaries have signed definitive agreements with the three founders of Patni Computer Systems,viz,Narendra Patni,Gajendra Patni and Ashok Patni,and private equity firm General Atlantic,to acquire their 45.6 per cent and 17.4 per cent stakes,respectively,at a price of Rs.503.5 per share,amounting to a total consideration of approximately $921 million, an iGate statement said. The transaction is valued at approximately $1.22 billion including the mandatory open offer to the public shareholders of Patni,the company said. The transaction is expected to be completed by the middle of 2011.
The Mumbai headquartered Patni Computer Systems where several Infosys founders including N R Narayana Murthy initially worked has 16,556 employees,282 customers,22 global delivery centers,and offices in 30 locations worldwide. It reported revenues of $689 million in September last year.
iGATE has 8,278 employees,82 customers,seven global
delivery centers,and offices
in 16 countries,and reported revenues of $252 million for
the period ending September 30,2010.
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