Caritor to acquire Keane for $854 million

BANGALORE: IT services provider Caritor Inc. has signed a definitive agreement to acquire Keane Inc, a business process and IT services firm for an all-cash purchase price of approximately $854 million.

According to the agreement, holders of Keane’s common stock will receive $14.30 per share in cash. The purchase price represents a 19 per cent premium over Keane’s closing share price on February 6, 2007.

The transaction will be financed through a combination of equity to be contributed to Caritor by Citigroup Venture Capital International and debt financing by Citigroup Global Markets Inc., UBS Securities LLC, and Bank of America Securities LLC.

The Boards of Directors of both Keane and Caritor have approved the transaction. Following completion of the transaction, the combined company with expected revenues over $1 billion and more than 14000 prefessionals, will operate under the Keane name and maintain Keane’s employee base in Boston, Massachusetts. Caritor chairman and CEO Mani Subramanian will become chairman and CEO of the combined entity.

“Caritor was founded on the belief that there was a strong need for a properly proportioned, US-based multi-national resource to meet the ever-growing software development and business process outsourcing needs of our global clients,” said Mani Subramanian, founder, chairman and CEO of Caritor. “The combination of Caritor and Keane will offer clients comprehensive services. I look forward to working with a combined team of professionals to build upon the tradition of integrity and client service common to both Caritor and Keane.”

“As a private company, combined with Caritor, Keane will be better positioned to continue to invest in growth, provide new employee opportunities, and service its clients,” said John Keane Sr, founder and chairman of Keane, Inc.

The transaction will be completed in the Second Quarter of calendar year 2007, subject to receipt of Keane stockholder approval and customary regulatory approvals.

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