iGate delays $900 mn deal with Patni

BANGALORE, INDIA: U.S. software company iGate said it cancelled a press conference it had scheduled for Monday, at which it was expected to announce a deal with Apax Partners for a majority stake in Patni Computer Services for more than $900 million.

"The significant corporate development that was set to be announced on Monday is off," an iGate spokesman said, declining to provide further details.

The spokesman did not confirm whether the announcement was related to Patni, but a source close to the matter told Reuters on Friday that the press conference was scheduled to announce the deal.

Apax Partners and Patni Computer were not immediately available for a comment.

A consortium of Apax Partners and iGate was close to buying 63 percent of Patni Computer at about 500 rupees a share, the source had told Reuters recently. An expected deal for Patni had also been widely reported in the media.

Patni shares closed at 476.65 rupees in Friday trading on the Bombay Stock Exchange.

The iGate-Apax consortium, which beat a rival team of Carlyle, Advent International and Akansa Capital to the deal, had planned to make an open offer for another 20 per cent stake in Patni following the agreement, the source had said.

Talks to sell a stake in the software services exporter have been going on for about two years, but Patni has failed to finalize a deal due to valuation gaps with potential buyers, sources previously had told Reuters.

The founding Patni brothers were in talks to sell their 46 percent stake, while private equity firm General Atlantic was selling its roughly 17 percent holding in the software services exporter, sources previously told Reuters.

Patni, a mid-sized IT services company also listed in New York, provides technology outsourcing services to industries such as insurance, telecoms, utilities and retail. Small- and mid-cap Indian IT companies have been grappling with tepid demand, high attrition rates and a rise in expenses.